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To be effective issuing and investing in bonds knowledge of their terminology, characteristics, and features is essential the contract that describes the term of a borrowing arrangement between a firm that sells a bond issue and the investors who purchase the bonds is called

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The contract that describes the term of a borrowing arrangement between a firm that sell a bond issue and the investors who purchase the bonds is called INDENTURE. An indenture is a legal and binding contract which states in clear terms all the important characteristics of a bond. The document must be signed by all the parties involved. 
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