Help
Course Catalog > Bonds > 100
Bonds 107: Secured and Unsecured Bonds

Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
The collateral behind a railroad car purchase may be the railroad car itself.
Choose wisely. There is only one correct answer.
True. Railroads commonly sell equipment trust certificates to buy new equipment. Sometimes, the collateral is the item that was bought.
2.
What secures revenue bonds?
Choose wisely. There is only one correct answer.
Revenue generated by projects funded by the bonds. This revenue is used to pay interest and principal to investors.
3.
Although unsecured bonds have no backing, they are protected from default by a promise to pay.
Choose wisely. There is only one correct answer.
True. This promise is called "full faith and credit," and many corporations and government units with good credit use it.
4.
What is a debenture?
Choose wisely. There is only one correct answer.
A bond without collateral behind it. Some pay high yields, and many are sold by corporations, but all of them lack collateral.
5.
Municipal bonds that are not backed by collateral are called _______.
Choose wisely. There is only one correct answer.
General obligation bonds. Their collateralized counterparts are called revenue bonds.