Chartered Financial Analyst Level 1

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Explanation:

The correct answer is A because structured finance CDOs are specifically backed by asset-backed securities (ABS), residential mortgage-backed securities (RMBS), commercial mortgage-backed securities (CMBS), and other CDOs.

B is incorrect because collateralized loan obligations (CLOs) are backed by leveraged bank loans, not asset-backed securities.
C is incorrect because collateralized bond obligations (CBOs) are backed by corporate and emerging market bonds, not asset-backed securities.

Explanation:

B is incorrect because collateralized loan obligations (CLOs) are backed by leveraged bank loans, not asset-backed securities.
C is incorrect because collateralized bond obligations (CBOs) are backed by corporate and emerging market bonds, not asset-backed securities.

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Which of the following collateralized debt obligation (CDO) types is most likely to be backed by asset-backed securities?

Exam-Like

Structured finance CDOs

37.5%

Collateralized loan obligations

37.5%

Collateralized bond obligations

25.0%