Final answer:
A Collateral Agreement is a type of contract that secures an investment by providing assets as protection, reducing the risk of loss for both bonds and notes.
Step-by-step explanation:
The kind of agreement that reduces the risk of loss for both bonds and notes is a Collateral Agreement. This type of agreement involves the borrower providing the lender with security in the form of assets, such as property, stocks, or other valuable items, which can be seized in the event that the borrower fails to make payments on the bonds or notes.
Collateral agreements provide a level of protection for investors because they have a claim on the collateral, which may help in recovering their investments if the issuer defaults. Therefore, such agreements can mitigate the risk associated with lending money or investing in debt instruments.