Financial Derivatives Flashcards

1
Q

ARM(Adjustable-rate mortgage)

A

designed to shift interest-rate risk

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2
Q

MBS(mortgage-backed security)

A

A group of home loans that are bought from banks, investors get money.

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3
Q

CDO(Collateralized debt obligation)

A

A structure showing the pool of loans that are bought from investors

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4
Q

CDS(credit default swap)

A

boost the amount you earn in interest when the money is invested and kept away.

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