Question

Which of the following are included in the typical bond indenture? I. the basic terms of the bond; II. details of the protective covenants; III. sinking fund arrangements; IV. call provisions

Answer 1

D. I, II, III, IV. All of the above

Step-by-step explanation:

Bond indentures are legal contracts between the issuer and the trustee that specifies the scope and responsibilities of everyone involved (borrower, trustee and lender) and also the features of the bond like maturity date and so on.

Things found in a bond indenture may include but not all

1. The name of the issuer.

2. Terms of the bond

3. Its features such as the principal value, coupon rate, dates when interest payments will be made, and maturity date.

4. Issuer’s obligations.

5. If the bonds are secured or not.

6. Protective Covenants details

7. call provisions.

8. Bondholders’ rights

9. Sinking fund arrangements.

Four of which are mentioned in the question, hence the answer given.