Corporate Bonds
Which type of corporate bond is backed only by the general creditworthiness of the issuer?
A debenture is an unsecured bond backed only by the issuer's ability and promise to pay. Mortgage bonds, equipment trust certificates, and collateral trust bonds are all secured by specific assets that bondholders can cl
Complete Analysis & Legal Rationale
A debenture is an unsecured bond backed only by the issuer's ability and promise to pay. Mortgage bonds, equipment trust certificates, and collateral trust bonds are all secured by specific assets that bondholders can claim if the issuer defaults.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Does not match the governing securities rule described in the explanation.
Does not match the governing securities rule described in the explanation.
Matches the verified teaching point in the explanation.
Does not match the governing securities rule described in the explanation.
Official Standard: Outline-level citation: item maps to Series 7 topic coverage. Prefer a specific FINRA/SEC/MSRB rule citation in a later author pass.