Final answer:
CMOs are collateralized by GNMA, FNMA, and FHLMC mortgage-backed pass-through certificates, which are secured by mortgage loans.
Step-by-step explanation:
Collaterized Mortgage Obligations (CMOs) are collateralized by a variety of mortgage-backed securities. Specifically, they can be collateralized by GNMA (Government National Mortgage Association), FNMA (Federal National Mortgage Association), or FHLMC (Federal Home Loan Mortgage Corporation) mortgage-backed pass-through certificates. These certificates represent interests in mortgage loans that are secured by real property and provide the cash flow for CMO payments.