Asked by Vaishak Reddy on May 12, 2024
Verified
Veronica just bought a bond from United Pet Group.This bond is only backed by the financial reputation of the company.What type of bond did Veronica buy?
A) Debenture
B) Secured bond
C) Certificate of deposit
D) Commercial paper
Debenture
Unsecured corporate bond.
Financial Reputation
The perception of a person's or organization's financial integrity and ability to meet monetary obligations, affecting their access to capital.
- Recognize and elucidate the different kinds of debt instruments and those who issue them.
Verified Answer
MV
Marta VianaMay 17, 2024
Final Answer :
A
Explanation :
Debenture bonds are unsecured bonds that are not backed by collateral but rather by the creditworthiness and reputation of the issuer. Since the bond Veronica bought is only backed by the financial reputation of United Pet Group, it is classified as a debenture.
Learning Objectives
- Recognize and elucidate the different kinds of debt instruments and those who issue them.
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