Unsecured Corporate Debt Is Called A(n)

question 31

Multiple Choice

Unsecured corporate debt is called a(n) :

• A) indenture.
• B) debenture.
• C) bond.
• D) mortgage.
• E) None of these.

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Definitions:

Coupon Bond

A bond that pays the holder a fixed interest rate (coupon) over the bond's lifetime and repays the principal at maturity.

Current Yield

A measure of the annual income (interest or dividends) generated by an investment, expressed as a percentage of the current market price.

Par Value

The face value of a bond or stock as stated by the issuing company, which may differ from its market value. For bonds, it's the amount to be repaid at maturity; for stocks, it's the nominal value assigned upon issuance.

Callable Bond

A type of bond that gives the issuer the right to redeem the bond at a predetermined price before its maturity date.