Question

Which of the following factors was NOT listed as a contributing factor to the increased production and sale of CDO's

		slowing sales of the mezzanine tranches of private label MBS
		credit rating agencies rated CDO's as safe
		CDO had a relatively high return relative to other bond-type assets
		the federal government insured the CDO's

Answer 1

CDO's or collateral debt obligations are the financial instruments that have an underlying asset attached to them and their value depends on the value of this underlying asset.

However, CDO's are complex financial derivative products and does not get insured by the government as like the typical checking account deposit at the bank.

So,

The federal government insured the CDO's is not a contributing factor that has resulted in an increase in production and sale of CDO's.

Hence, the correct answer is the option (4).