A Contract Pledging Title to Assets as Security for a Note

question 65

Multiple Choice

A contract pledging title to assets as security for a note or bond is known as a(an) :

• A)Sinking fund.
• B)Mortgage.
• C)Equity.
• D)Lease.
• E)Indenture.

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Definitions:

Par Value

It represents the nominal or face value of a security, such as a share or bond, and is the minimum price at which such securities might be issued originally.

Collateralized Bonds

Bonds that are secured by a collateral asset, providing higher security to bondholders in case of issuer's default.

Issuing Firm

A company or entity that releases securities into the financial market for the first time, often through initial public offerings (IPOs) or bond sales.

General Earning

The total income generated by an entity from its operational activities.