Q354
Type of bonds that have tangible property as a collateral are classified as
A.
collateral security
B.
commercial trust notes
C.
equipment trust certificates
AnswerD.
equipment bonds
Answer: Option C
Solution
Answer: Option C
Solution:
Type of bonds that have tangible property as a collateral are classified as equipment trust certificates. An equipment trust certificate (ETC) refers to a debt instrument that allows a company to take possession of and enjoy the use of an asset while paying for it over time. The debt issue is secured by the equipment or physical asset. During this time, title for the equipment is held in trust for the holders of the issue.