A bond that has no collateral is called a ________.
A) callable bond
B) debenture
C) junk bond
D) mortgage

Question

Quizplus · Accepted Answer

A debenture is a type of bond that does not have any collateral backing it up. Instead, it relies solely on the borrower's creditworthiness and ability to repay the loan. Callable bonds may or may not have collateral, and refer instead to the option for the issuer to redeem the bond before its maturity date. Junk bonds typically have a lower credit rating and higher risk of default, but may still have collateral backing the bond. Mortgages, by definition, involve collateral in the form of a property that secures the loan.

A Bond That Has No Collateral Is Called a ________