Bonds secured by collateral tend to be safer than other bonds issued by the firm.

Name: Bonds secured by collateral tend to be safer than other bonds issued by the firm.
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Question

Bonds secured by collateral tend to be safer than other bonds issued by the firm.​

Quizplus · Accepted Answer

Bonds secured by collateral have a specific asset pledged as collateral, which acts as a guarantee for the bondholders in case of default. Therefore, these bonds tend to be safer as the collateral provides a form of security for the investors.

Bonds Secured by Collateral Tend to Be Safer Than Other