It is a written contract between the borrower and the lender.

Understand the Problem

The question describes a financial concept where it refers to a written contract between a borrower and a lender, asking for the correct term related to this concept. The options provided suggest it is specifically distinguishing between stocks and bonds, with the correct answer being bonds.

More Information

A bond is a type of debt security in which the issuer owes the holder a debt. It is essentially a formal loan contract between a borrower (issuer) and a lender (holder), where the issuer promises to pay back the borrowed amount with interest.

Tips

A common mistake is confusing bonds with stocks, which represent ownership in a company rather than a loan agreement.

Sources

• Loan agreement - Wikipedia - en.wikipedia.org
• How to Write a Personal Loan Agreement - Investopedia - investopedia.com