This module covers the numerous debt offerings available. These include government and public bonds, asset-backed securities, and structured mortgage-based products such as collateralized mortgage obligations (CMOs) and credit default swaps. Preferred stocks and using yield curves to make investment decisions are both also addressed.

3–1 Explain terminology, characteristics, and sources of risk of government and corporate debt securities.
3–2 Explain the structure and regulatory concerns of asset-backed securities (ABSs).
3–3 Understand how mortgage-backed securities (including CMOs, CDOs, and CDSs) are structured and how they affect the mortgage industry.
3–4 Explain contributing factors of the housing and economic crisis of 2008.
3–5 Explain terminology and characteristics of preferred stocks.
3–6 Evaluate the investment implications of yield curves.

Author: Jim Pasztor, MS, CFP®

Jim Pasztor, vice president of Academic Affairs at the College for Financial Planning is also involved with several of the College’s investment courses and the white paper series. He is a CFPM® practitioner, and has an MS degree in personal financial planning and an MSF degree in financial analysis, both from the College for Financial Planning. Jim was the recipient of the Edward D. Baker III Journal Award from IMCA in 2014 for his article Endogenous Risk and Dangers to Market Stability. You can reach Jim at jim.pasztor@cffp.edu.

Complexity Level: Advanced