A Bond in Which No Assets Support the Corporations' Obligation

question 6

Multiple Choice

A bond in which no assets support the corporations' obligation to repay the face value of the bond is called a(n) ________ bond?

• A) Unsecured
• B) Secured
• C) Equity
• D) Convertible
• E) Income

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Definitions:

Underlying Stock

The basic security that one has the right to buy or sell under the terms of an option contract or other derivative agreement.

Value

The financial, tangible, or estimated value of a property, product, or service.

Intrinsic Value

The actual, inherent worth of an asset, independent of its market value, often calculated using fundamental analysis.

Call

An option contract that gives the holder the right, but not the obligation, to buy a security at a specified price within a specified time period.