MBS are financial instruments that represent a claim to the cash flows from a pool of mortgages. A CDO, on the other hand, is a complex financial instrument that pools together a variety of debt such as corporate bonds, mortgages, and other types of loans.

A mortgage-backed security (MBS) is an ABS where the specific assets behind the security are mortgages. A collateralised debt obligation (CDO) is an ABS where the specific assets behind the security are bonds, often a pool of MBS.

A collateralized mortgage obligation, or CMO, is a type of MBS in which mortgages are bundled together and sold as one investment, ordered by maturity and level of risk. A mortgage-backed security, or an MBS, is a kind of asset-backed security that represents the amount of interest in a pool of mortgage loans.

A single-name CDS references only one security and the credit risk to be transferred in the swap may be very large. In contrast, a synthetic CDO references a portfolio of securities and is sliced into various tranches of risk, with progressively higher levels of risk.