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3 Ways to Supercharge Your Retirement Savings | | | |
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Understanding Collateralized Debt Obligations or CDOs | A collateralized debt obligation is created when a financial institution, such as a bank, takes the debts owed by lots of borrowers, puts them together into a “pool”, divides that pool into different categories based on risk called “tranches” and then sells off those tranches to investors such as hedge funds. CDOs played a major role in the Great Recession of 2008-2009. | | | |
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