5 ms·
>a CDO (collateralized debt obligation) is a security formed by packaging together hundreds of home mortgages there's actually another layer of abstraction inv
by jwb119 17y ago
>a CDO (collateralized debt obligation) is a security formed by packaging together hundreds of home mortgages
there's actually another layer of abstraction involved. a mortgage backed security, or collateralized mortgage obligation (CMO), is formed by packaging together a large group of home mortgages. a CDO is made by packaging together hundreds of MBS obligations or CMOs.
- yangyang 17y agoCDOs are not necessarily just composed of mortgage derivatives. They can be put together from bonds, CDSs (synthetic CDOs), syndicated loans (CLOs), other CDOs (CDOs squared), a mixture of these and other debt instruments.
- therealazeem 17y agoYep. And you can count the leverage at every single level