Products & Their RisksQuestion 17 of 398
A bond's indenture is best described as:
a.The written contract stating the issuer's obligations and the bondholders' rights
b.The market price at which the bond currently trades
c.The credit rating assigned by a rating agency
d.The commission charged when the bond is bought
Explanation
The indenture (deed of trust) is the legal contract that spells out the coupon, maturity, covenants, and the rights of bondholders and duties of the issuer. It is not a price, a rating, or a commission.
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