| Collateralized
Mortgage Obligation - CMO |
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A type of mortgage backed security that creates separate pools of
pass-through rates for different classes of bondholders with varying
maturity's, called tranches. The repayments from the pool of pass-through
securities are used to retire the bonds in the order specified in
the bonds prospectus.
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CMO's
usually offer low returns, because they are very low risk and sometimes
backed by government securities. |
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Dictionary
