Series 6 - Investment Company And Variable Contracts Products Representative Exam

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A company with poor credit that wants to raise capital via a bond issuance will most likely use which of the following instruments?

Guaranteed bonds
A
Debentures
B
Short term bonds
C
Collateral trust certificate
D

Explanations

Collateral trust certificates are backed by securities that the issuer owns. A Trustee holds the securities, and in the event of a default, uses them to pay off the bonds.

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