"In simple terms, one could say that a CDO is like a vow to pay an amount of money to investors. This is done in pre-determined series. Of course, the amount of money depends on how much money the CDO gets from the underlying assets. The whole CDO-system is possible as long as investors are prepared to invest money, which is used to buy the group of assets the CDO owns(D. Duffie, N. Garlea nu, 2001)]. In other words, the CDO needs money invested in its foundation, which hopefully results in a good return."
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