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Bonds 107: Secured and Unsecured Bonds

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1.
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.
2.
Which unsecured bond can be exchanged for stock?
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Convertible bond. This bond has no collateral backing it.
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.
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.
5.
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.