In addition to providing revenue options for investors, but also by participating in the synthetic CDO derivative instruments (such as swaps, insurance contracts and options) to reduce and take a lot of risk associated with the loan. By packaging these options as support for the CDO, the issuer may be part of the transfer of risk to investors while earning revenue from the sale of the CDO. However, the synthetic CDO investors should be aware that, even though they may only pay a fraction of the potential of the amazing rewards, but they bear full responsibility for any breach of contract payments, so the punishment is also a heavy burden.
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