Covered bonds are issued by a bank and are backed by a pool of assets, typically high-quality residential or commercial mortgages. Building societies and credit unions may issue similar bonds, but they are not classified as "covered" bonds unless they meet certain criteria set by regulatory authorities. Therefore, the correct answer is D.

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Covered Bonds

Question 46

Multiple Choice

Covered bonds:

A) can only be issued by building societies
B) can only be issued by credit unions
C) can only be issued by building societies and credit unions
D) are issued by a bank, backed by a pool of assets

Correct Answer: