9. More on types of bonds Aa Aa You can distinguish the various types of bonds by their terms of contract, pledge of collateral, and so on. Identify the type of bond based on each description given in the table that follows: Description Type of Bond These bonds are not backed by any physical collateral. They are backed by the reputation and creditworthiness of the issuing company. These bonds are considered the riskiest of all corporate bonds and thus offer the highest interest rates. These bonds are collateralized securities with first claims in the [ event of bankruptcy. Based on your understanding of bond ratings and bond-rating criteria, which of the following statements is true? O An indenture is a legal document that details the rights of bondholders. If the indenture includes a sinking O An indenture is a legal document that details the rights of bondholders. If the indenture includes a sinking funds provision, the bond will have more default risk. funds provision, the bond will have less default risk. In 2008, the United States began to witness one of the worst recessions since the 1930s. The collapse of the housing bubble in 2006 led to a massive decline in real estate prices, affecting consumers and institutions, especially banking and financial entities. Severe liquidity shortfalls in the United States as well as other global markets led to a serious credit crisis. During the credit crisis of 2008-2009, several banks and other businesses went through a reo rganization process or were forced to liquidate. Consider the following example