A bond that is backed only by the reputation of the issuing corporation is called a(n) __________ bond.
Understand the Problem
The question is asking about a type of bond that is supported solely by the reputation of the issuing corporation. The task is to identify the correct term to fill in the blank from the provided options.
Answer
debenture bond
The final answer is debenture bond.
Answer for screen readers
The final answer is debenture bond.
More Information
Debenture bonds are unsecured and rely solely on the issuer’s credit and reputation, as opposed to mortgage bonds which are secured by specific assets.
Tips
A common mistake is confusing debenture bonds with mortgage bonds; remember, mortgage bonds are backed by collateral.
Sources
- Investopedia - Debenture - investopedia.com
- Study.com Explanation - homework.study.com
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