Collateralized mortgage obligation (CMO)
A security backed by a pool of pass-through rates, structured so that there are several classes of bondholders with varying maturities, called tranches. The principal payments from the underlying pool of pass-through securities are used to retire the bonds on a priority basis as specified in the prospectus. Related: mortgage pass-through security.
Nearby TermsCollateralized Debt Obligation (CDO) Collateralized loan obligation (CLO) Collateralized mortgage obligation (CMO) Collecting Bank Collection
Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University