A corporation issuing bonds appoints a trustee to represent bondholders, because corporate bond indentures are very difficult for the average person to read and understand.

Question

Quizplus · Accepted Answer

This is true, as the trustee is responsible for ensuring that the terms of the bond indenture are being followed and representing the interests of the bondholders in case of default or other issues. The bond indenture can be a complex legal document, so having a trustee to interpret and enforce it is important for the bondholders.

A Corporation Issuing Bonds Appoints a Trustee to Represent Bondholders