Question

      Any legal contract or agreement between a borrower and lender that defines the rights and obligations of the parties in relation to a bond issue is called:

    A debenture Correct Answer Incorrect Answer
    B indenture Correct Answer Incorrect Answer
    C covenant Correct Answer Incorrect Answer
    D formal agreement Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    Any legal contract or agreement between a borrower and lender that defines the rights and obligations of the parties in relation to a bond issue is called indenture. Any restrictions or conditions mentioned in the agreement are called covenants

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