Question

What word describes the process by which a corporate trustee certificates that securities have been validly issued according to the terms of an indenture and in the correct amount?

a. Reconcilement
b. Authentication
c. Verification
d. None of the above.

Answer 1

The correct answer is option b. Authentication.

Step-by-step explanation:

The process by which a corporate trustee certifies that securities have been validly issued according to the terms of an indenture and in the correct amount is known as authentication. This process involves the verification that the issuance of securities is in compliance with the terms set out in the indenture agreement, ensuring that the amount of securities issued is correct and that they are legally valid.

The trustee's authentication is crucial because it gives the investors confidence that the securities they are buying are legitimate and properly issued.