Final answer:
Debentures often pledge fixed assets or real property as security when issued by companies or nonprofit organizations. Bonds, including debentures, are debt instruments that may be secured by specific assets or backed by the issuer's creditworthiness.
Step-by-step explanation:
Debentures commonly pledge fixed assets or real property (such as buildings and land) as security. When companies or nonprofit organizations want to borrow money, they can issue debentures as a way of securing financing. Unlike shares of stock, debentures are not secured by physical assets or collateral. However, in some cases, they may be backed by the issuer's general creditworthiness or through a security interest in specific assets.
A common option for lenders or investors is to buy bonds, which are a formal debt instrument. Government bonds, for example, are low-risk as they are backed by the government's promise to pay. For corporate bonds, if the issuer fails to meet its payment obligations, bondholders have the right to require the company to declare bankruptcy and liquidate assets to fulfill its obligations. Debentures, being a type of bond, operate similarly, and if secured, may have claims against particular assets of the issuer.