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LOS f: Describe a collateralized debt obligation (CDO) and the different types (cash and synthetic).
Q1. Which of the following statements regarding collateralized debt obligations (CDOs) is FALSE?
A) Interest rate swaps are rarely used due to scrutiny from rating agencies.
B) The senior tranche is usually paid a floating rate.
C) Mezzanine tranches receive a fixed rate.
Q2. Which of the following statements regarding cash collateralized debt obligations (CDOs) is FALSE?
A) Balance sheet-driven are the majority of cash CDOs.
B) An arbitrage CDO is issued to profit on the spread between the return on the underlying assets and the return paid to investors.
C) Cash CDOs have three phases in their lifetime.
Q3. Which of the following statements regarding synthetic collateralized debt obligations (CDOs) is FALSE?
A) The senior portion doesn’t require funding.
B) The ramp up period is longer than that for cash CDOs.
C) A credit default swap is sold.
Q4. A collateralized debt obligation (CDO) is an asset that is least likely to be backed by each of the following types of debt obligations:
A) non-investment grade corporate bonds.
B) investment grade corporate bonds.
C) bank loans to corporations. | 
发表于 2009-3-26 10:22
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