A debenture differs from an unsecured note for what primary reason?
A)The issuing company normally does not offer security.
B)Some form of security is normally offered by the issuing company.
C)The lending company does not require security over any assets of the issuer.
D)None of the above

Question

Quizplus · Accepted Answer

A debenture is a type of bond that is backed by the creditworthiness and reputation of the issuer, but does not have any specific collateral backing it. However, the issuing company typically offers some form of security, such as a lien on its assets or a pledge of future revenues, in order to secure the bond and provide additional protection to investors. In contrast, an unsecured note does not have any collateral or security backing it, and is therefore considered to be riskier for investors.

A Debenture Differs from an Unsecured Note for What Primary