Question

  Any legal contract or agreement between a borrower and lender that defines the rights and obligations of the parties in relation to a bond issue is called:

A debenture Correct Answer Incorrect Answer
B indenture Correct Answer Incorrect Answer
C covenant Correct Answer Incorrect Answer
D formal agreement Correct Answer Incorrect Answer
E None of the above Correct Answer Incorrect Answer

Solution

Any legal contract or agreement between a borrower and lender that defines the rights and obligations of the parties in relation to a bond issue is called indenture. Any restrictions or conditions mentioned in the agreement are called covenants

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