A Collateral Debt Obligation, or CDO, is a type of complex financial product that is backed by a pool of loans and other assets. CDOs are typically sold to institutional investors, such as banks, hedge funds, and insurance companies.CDOs are structured in a way that allows for the potential for high returns, but also comes with a higher degree of risk. For this reason, CDOs are often used as a way to hedge against other investments.While CDOs can be a risky investment, they can also be a lucrative one. For this reason, it is important to understand the basics of how they work before making any decisions.