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Course 203: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Collateralized Mortgage Obligations | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mortgage-backed securities, or pass-throughs as they are sometimes called, provide an investment that has the security of bonds but with a higher yield. Unlike bonds, however, you never know when the home mortgages that back pass-throughs might be prepaid, introducing a note of uncertainty to your investment. Collateralized mortgage obligations, or CMOs, are mortgage-backed instruments that make the term of your investment more reliable. |
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Learn how to invest like a pro with Morningstar’s Investment Workbooks (John Wiley & Sons, 2004, 2005), available at online bookstores. | ||
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