Asked by Shannon Bubar on Jul 03, 2024

verifed

Verified

An unsecured bond is referred to as a(n) :

A) indenture.
B) debenture.
C) mortgage bond.
D) subordinated mortgage bond.

Unsecured Bond

A bond not backed by collateral, relying on the issuer's creditworthiness.

Indenture

A formal legal agreement, contract, or document between two parties, especially one detailing the terms and conditions of a bond or debenture.

Debenture

A type of debt instrument that is not secured by physical assets or collateral but is backed only by the general creditworthiness and reputation of the issuer.

  • Identify the functions of bond indentures and their significance within the bond market.
verifed

Verified Answer

MY
Mikey YahnerJul 08, 2024
Final Answer :
B
Explanation :
An unsecured bond is commonly referred to as a debenture. Indenture refers to the legal document that outlines the bond's terms and conditions, while a mortgage bond is a secured bond backed by a specific property. A subordinated mortgage bond is also a type of secured bond, but it has a lower claim on assets than other secured bondholders.