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Exam Series 6 All Questions

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Exam Series 6 topic 1 question 60 discussion

Actual exam question from FINRA's Series 6
Question #: 60
Topic #: 1
[All Series 6 Questions]

Which of the following statements regarding CMOs is false?

  • A. CMOs are zero-coupon bonds that are backed by real estate.
  • B. Relative to other bonds, CMOs are illiquid.
  • C. CMO investors are divided into classes, and the class determines when the investor will receive payments of principal.
  • D. CMOs are considered to have lower risk and, therefore, offer lower returns.
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Suggested Answer: A 🗳️
The false statement is that CMOs are zero-coupon bonds that are backed by real estate. CMOs are not zero-coupon bonds; they make payments that include both interest and principal.
by lolojepu at April 6, 2025, 1:13 a.m.

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