Which of the Following Statements Is Correct

question 17

Multiple Choice

Which of the following statements is correct?

• A)A secured bond has specific assets pledged as collateral to secure it.
• B)An unsecured bond can be paid at the option of the issuer.
• C)A bond trustee is appointed to represent the issuing company.
• D)The bond indenture specifies the market rate of interest the investors will earn.

---

Definitions:

Voting Shares

Shares that give the shareholder the right to vote on company matters, such as electing the board of directors, at shareholder meetings.

Net Income

The total earnings of a company after subtracting all expenses, including taxes and operational costs, indicating its profitability over a specific period.

Securitization

The process of converting assets, often illiquid, into marketable securities.

Structured Entity

A legal entity with a specific purpose, restricted operations, and a limited scope of activities, often created for securitization, investment, or to hold assets.