Structured Products, Alternatives, Risk, and Fees

Free FINRA Series 7 (General Securities Representative) lesson in Investment Products and Recommendations. 26 min read, ~3,882 words.

Pass-throughs pay monthly principal + interest; GNMA carries full faith and credit of the U.S. government, FNMA and FHLMC do not. CMO tranches redistribute prepayment risk: PAC is most stable, companion absorbs the shock, Z-tranche accrues interest until prior tranches retire. CDO loss waterfall: equity tranche absorbs first, then mezzanine...

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