CFA Practice Question

There are 266 practice questions for this study session.

CFA Practice Question

Bond covenants are typically described in the ______.

A. bond indenture
B. bond debenture
C. bond prospectus
Correct Answer: C

User Contributed Comments 5

User Comment
geofin WTF? Bond indenture (also trust indenture or deed of trust) is a legal document issued to lenders and describes key terms such as the interest rate, maturity date, convertibility, pledge, promises, representations, covenants, and other terms of the bond offering. (Wikipedia)
johntan1979 Prospectus describes; Indenture lists. This is actually in reading "Overview of Bond Sectors and Instruments".
HolzGe1 got me :D
ascruggs92 geofin, a bond indenture and bond debenture are the same thing, the only difference being that indentures are collateralized and debentures are not. The definition you provided is of the legal document held by each party in the transaction after terms have been established and signed on. The prospectus is where potential investors can find the terms of the bond.
khalifa92 @ascruggs92: I thank you on behalf of everyone benefitted (past, present & future) from you comment, nicely explained.
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