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Bonds 107: Secured and Unsecured Bonds

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1.
Mortgage bonds are backed by _______.
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Real estate. That is why they are called mortgage bonds.
2.
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.
3.
Municipal bonds that are not backed by collateral are called _______.
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General obligation bonds. Their collateralized counterparts are called revenue bonds.
4.
Which unsecured bond can be exchanged for stock?
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Convertible bond. This bond has no collateral backing it.
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.