Which of the following statements is/are correct about long-term loans?
I. Debentures are generally sold with a lower interest rate than mortgage bonds or secured bonds.
II. The quality of a debenture depends on the general creditworthiness of the issuing company.
A) I only
B) II only
C) Both I and II
D) Neither I nor II

Question

Quizplus · Accepted Answer

Debentures are unsecured loans, so they typically carry a higher interest rate than secured bonds like mortgage bonds. The quality of a debenture indeed depends on the creditworthiness of the issuing company.

Which of the Following Statements Is/are Correct About Long-Term Loans