Final answer:
A collateral trust bond is backed by a portfolio of stocks and bonds owned by the issuer, offering security to bondholders through assets placed in trust. the correct answer is option D.
Step-by-step explanation:
The type of bond that is backed by a portfolio of stocks and bonds owned by the issuer is known as a collateral trust bond. These bonds provide security to the bondholders in the form of a claim on the assets placed in trust should the issuer default on their obligations. In contrast to collateral trust bonds, secured bonds are backed by physical assets, mortgage bonds are secured by real estate and equipment bonds are backed by the equipment purchased with the bond proceeds.