All Courses > 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.
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.
2.
Which unsecured bond can be exchanged for stock?
Choose wisely. There is only one correct answer.
Convertible bond. This bond has no collateral backing it.
3.
Unsecured bonds are issued with the issuer's promise to offer stock options in the future.
Choose wisely. There is only one correct answer.
False. The sellers do not offer stock options to investors at a later date when issuing unsecured bonds.
4.
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.
5.
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.