Bonds which are backed only by the good faith of the borrower are referred to as:
A) junk bonds.
B) unregistered bonds.
C) debenture bonds.
D) callable bonds.

Question

Quizplus · Accepted Answer

Debenture bonds are unsecured and not backed by any collateral, so they rely solely on the good faith and creditworthiness of the borrower. Junk bonds are also unsecured, but they are considered to be high-risk and speculative. Unregistered bonds simply means that the bonds are not registered with the SEC, and callable bonds have the option for the borrower to pay off the bonds early.

Bonds Which Are Backed Only by the Good Faith of the Borrower