Question

Choose the best answer:

The terms of a bond issue are spelled out in the bond:

a)offering memorandum.

b) indenture.

C) contract.

Answer 1

Option a, Offering memorandum gives details of the objectives, risks and terms of an investment dealing with private placement.

Option b, indenture is a legal agreement between the bond issuer and the bondholders. It gives details of a bond such as maturity date, payment dates, interest rates, covenants etc.

Option c, contract is a legally enforceable agreement between two or more parties.

Hence, the answer is option b.

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