Structured Products, Alternatives, Risk, and Fees

Free FINRA Series 7 (General Securities Representative) lesson in Investment Products and Recommendations. 26 min read, ~3,941 words.

Pass-throughs pay monthly principal plus interest; GNMA carries full faith and credit of the U.S. government, while FNMA and FHLMC have implied guarantees only. CMO tranches redistribute prepayment risk: PAC is most stable, the companion absorbs the shock, and the Z-tranche accrues interest into principal until prior tranches retire. CDO...

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