A collateralized debt obligation (CDO) is a complex financial product backed by a pool of loans and other assets and sold to institutional investors.
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What is an example of a collateralized debt obligation?
A CDO is a financial product structured by banks that pool and package cash-generating assets into financial securities. These are then sold to investors. For example, a mortgage-backed security is a CDO. Mortgages are the collateral.
What is an example of a debt obligation?
For example, a credit card agreement is an example of a credit obligation. If you're looking for debt relief and have a high credit card balance, you're legally obligated to pay off your credit card debt.
What is a collateralized loan obligation?
Collateralized loan obligations (CLOs) are a form of securitization where payments from multiple middle sized and large business loans are pooled together and passed on to different classes of owners in various tranches. A CLO is a type of collateralized debt obligation.
Which of the following best describes a collateralized debt obligation?
A Collateralized Debt Obligation (CDO) is a synthetic investment product that represents different loans bundled together and sold by the lender in the market.
Sep 20, 2022 · Collateralized Debt Obligation (CDO) is a structured product that banks can use to unburden themselves of credit risk.
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A collateralized debt obligation (CDO) is a type of structured asset-backed security (ABS). Originally developed as instruments for the corporate debt ...
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Structured finance security that is collateralized. (predominantly) by a pool of one of the following bond types: • Corporate bonds (investment grade and/or ...
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Oct 27, 2023 · A collateralized debt obligation is a type of derivative security because its price is derived from an underlying asset. Banks package together ...
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A CDO is a type of security that involves the aggregation of several sorts of debt and the sale of those debts as a single asset to a third party.
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A CDO is a leveraged transaction. As such, investors who buy the equity tranche use borrowed funds to generate a return higher than the funding costs.
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