Collateralised debt obligation (CDO) is:
A)an asset-backed bond issued in multiple classes or tranches
B)a mortgage issued in multiple classes or tranches
C)unsecured notes issued in multiple classes or tranches
D)commercial paper issued with collateral

Question

Quizplus · Accepted Answer

A collateralised debt obligation (CDO) is an asset-backed bond that is issued in multiple classes or tranches. Each tranche has different levels of risk and return, based on the underlying assets that are used as collateral for the CDO. Investors can choose to invest in different tranches based on their desired risk and return profile.

Collateralised Debt Obligation (CDO) Is