Question

Bonds that are issued against the general credit of the borrower are called _____

bonds.

a) secured
b) unsecured

Answer 1

Unsecured bonds are issued against the general credit of the borrower.

Step-by-step explanation:

Bonds that are issued against the general credit of the borrower are called unsecured bonds.

A bond is a financial contract through which a borrower agrees to repay the amount that it borrowed. Corporate bonds, municipal bonds, state bonds, and Treasury bonds are all examples of bonds. In the case of unsecured bonds, the borrower does not provide any collateral or specific assets as security to the lender.