Which of the following characteristics apply to collateralized mortgage obligations?

I. All bondholders receive a pro-rata share of all interest payments.
II. CMOs are derivative securities created from mortgage-backed bonds.
III. All principal payments are paid to the shortest remaining tranche.
IV. CMOs have definite maturity dates for each tranche.

A) I and II only
B) I and III only
C) I, II and III only
D) II, III and IV only


Answer: C

Business

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