Asked by Alier Alfonso-Ramos on Jun 29, 2024
Verified
Bonds issued against the general credit of the borrower are called
A) callable bonds.
B) debenture bonds.
C) mortgage bonds.
D) sinking fund bonds.
Debenture Bonds
A type of debt instrument that is not secured by physical assets or collateral but is backed only by the issuer's creditworthiness and reputation.
General Credit
A broad term that can refer to the creditworthiness of a business or the general ability to borrow money through financial instruments.
- Understand the different kinds of bonds, such as term bonds, secured and unsecured bonds, as well as callable and convertible bonds.
Verified Answer
JB
JalDip BarotJul 01, 2024
Final Answer :
B
Explanation :
Debenture bonds are unsecured bonds issued against the general credit of the borrower, meaning there is no specific collateral backing the bond. Callable bonds can be redeemed by the borrower before maturity, mortgage bonds are secured by a specific asset such as a property, and sinking fund bonds require the borrower to set aside funds to redeem the bond at maturity.
Learning Objectives
- Understand the different kinds of bonds, such as term bonds, secured and unsecured bonds, as well as callable and convertible bonds.