1. What is the principal purpose of collateralized mortgage obligations?
A. They help prospective home owners borrow money to buy a house.
B. They provide liquidity to help investors purchase securities with risk structures they desire.
C. They raise revenue for government operations.
D. They offer a means by which commercial enterprises can raise capital for major projects.
2. Which is true about the Federal National Mortgage Association (FNMA, or "Fannie Mae")?
A. It is owned by shareholders, not the U.S. government.
B. It originates mortgage loans to home buyers.
C. It does not set standards to be used by financial institutions for originating mortgage loans.
D. Fannie Mae securities are not asset-backed.