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    Question

    ___________ is a legal contract or agreement between a

    borrower and lender that defines the rights and obligations of the parties in relation to a bond issue?  
    A debenture Correct Answer Incorrect Answer
    B indenture Correct Answer Incorrect Answer
    C covenant Correct Answer Incorrect Answer
    D agreement Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    agreement between a lender and a borrower. In the context of a bank loan, an indenture is a mortgage indenture, which is a formal agreement that secures a loan by pledging property as collateral.    An indenture can also refer to a bond indenture, which is a contract that outlines the terms and conditions of a bond issuance. A bond indenture protects the rights of bondholders and ensures the issuer fulfills their obligations.  

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