Cole Amodeo 10/5/2017 CSR Response #2 Group B Word Count: 975 In case 4.5, “Casino Gambling on Wall Street,” the problem is that Wall Street gambles with peoples’ money using the Collateralized Debt Obligation method. The Collateralized Debt Obligation (CDO) method refers to an assemblage of individual debts, which can then be put into a transaction group and divided into smaller groups called tranches. The conundrum with this method is that there exist so-called synthetic CDOs, which makes so that funds are not distributed evenly, but rather that the CDOs pay in the order that they are obtained, when they should prioritize equality. Collateralized Debt Obligation combines multiple funds in hopes that when the risk is taken, the outcome will be significantly more capital. Synthetic CDOs were formed because the conventional CDOs did not make enough money, and so the desire for more capital caused alterations, and higher risk. The real problem is that the investors, which are generally lower to middle class people, take all of the risk, and the managers of the funds, or those who are already upper class, are reaping the major profits from this system of managing funds. The moral dilemma in this case is that because people in the highest order, or with the most money, are given top priority, equal access to the funds is not given because people in the
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- Spring '13