Welcome to Westonci.ca, your one-stop destination for finding answers to all your questions. Join our expert community now! Find reliable answers to your questions from a wide community of knowledgeable experts on our user-friendly Q&A platform. Our platform provides a seamless experience for finding reliable answers from a network of experienced professionals.
Sagot :
A collateralized debt obligation (CDO) pays out cash flows from a collection of assets in different tranches, with the highest.
Structured asset-backed security (CDO) is a type of collateralized debt obligation (CDO). CDOs were initially designed as corporate debt market instruments, but from 2002 they were used to refinance mortgage-backed securities. A CDO can be viewed as a promise to pay investors in a specified order based on the cash flow it receives from the pool of bonds or other assets it holds, similar to other private label securities backed by assets.
In contrast, the probability of default (PD) for CDOs is often calculated using bond or asset ratings. A pool of loans and other assets serves as the collateral for the intricately designed financial product known as a collateralized debt obligation.
If the loan defaults, the underlying assets act as collateral. CDOs are a practical tool for transferring risk and freeing up resources while being risky and not suitable for all investors.
Learn more about collateralized debt obligation here:
https://brainly.com/question/24157864
#SPJ4
Thank you for choosing our service. We're dedicated to providing the best answers for all your questions. Visit us again. Thank you for visiting. Our goal is to provide the most accurate answers for all your informational needs. Come back soon. Westonci.ca is your go-to source for reliable answers. Return soon for more expert insights.
