Chapter15: Harvesting The Business Venture Investment
Section15.5: Outright Sale
Problem 1CC
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What is a CMO?
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Step 1 DEFINATION
A collateralize mortgage obligation (CMO) refers to a type of mortgage-backed security that contains a pool of mortgages bundled together and sold as an investment. Organized by maturity and level of risk, CMO's receive cash flows as borrowers repay the mortgages that act as collateral on these securities. In turn, CMO's distribute principal and interest payments to their investors based on predetermined rules and agreements.
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