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- Mortgage-backed securities are commonly contained within collateralized debt obligations (CDOs). Question 17 options: True FalseA Collateralized Mortgage Obligation (CMO) allows you to create some AAA rated tranches from a pool of subprime mortgages by ordering the tranches by payback precedence. Question 36 options: True FalsePass through securities alleviate risk from their balance sheets by O A. Keeping the mortgages on their balance sheet B. Removing mortgages from their balance sheets C. Hedging risks by using forwards & futures contracts O D. Allowing borrowers to foreclose on their mortgages
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