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Bonds 107: Secured and Unsecured Bonds

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1.
What secures revenue bonds?
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Revenue generated by projects funded by the bonds. This revenue is used to pay interest and principal to investors.
2.
What is a debenture?
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A bond without collateral behind it. Some pay high yields, and many are sold by corporations, but all of them lack collateral.
3.
Mortgage bonds are backed by _______.
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Real estate. That is why they are called mortgage bonds.
4.
Which bond's interest and principal can be repaid by the US government?
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Treasury bond. The US Treasury sells its own bonds.
5.
Unsecured bonds are issued with the issuer's promise to offer stock options in the future.
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False. The sellers do not offer stock options to investors at a later date when issuing unsecured bonds.