Series 7 Exam Question 23: Answer and Explanation

Question: 23

CMOs purchase all of the following securities EXCEPT

• A. GNMA
• B. SLMA
• C. FHLMC
• D. FNMA

Correct Answer: B

Explanation:

B.CMOs (Collateralized Mortgage Obligations) invest in GNMA (Ginnie Mae), FNMA (Fannie Mae), and FHLMC (Freddie Mac) bonds. CMOs do not purchase SLMA (Sallie Mae) bonds because SLMAs are issued to fund student loans.