SIE Exam Question 11: Answer and Explanation

Question: 11

Which of the following is false regarding collateralized mortgage obligation (CMO) advertisements?

  • A. Advertisements may not contain a comparison with any other investment vehicle.
  • B. Advertisements may contain comparisons with CDs.
  • C. Advertisements must include a description of the initial issue tranche.
  • D. Advertisements that contain an anticipated yield must disclose the prepayment assumption used to calculate the yield.

Correct Answer: B

Explanation:

CMO advertisements may not contain comparisons with any other investment vehicle, including CDs.

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