More types of bonds

10. More on types of bonds A legal document that details the rights of bondholders and the issuer is called \begin{tabular}{|c|} \hline a debenture \\ \hline an indenture \\ \hline a mortgage bond \\ \hline \end{tabular} If the legal document just described includes a sinking fund provision, is the bond considered to have more or less default risk, all else being equal? Less default risk More default risk 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: Ambac Financial Group, MBIA Inc., Federal Guaranty Insurance Company, Assured Guaranty, and CIFG are some of the municipal hond insurance companies in the United States. Municipal bond insurance companies guarantee to pay if the issuer defaults. Based on your understanding of bond ratings and bond-rating criteria, which of the following statements is true? During an economic recession and in a pessimistic environment, the yield spread between U.S. government bonds and corporate bonds will be higher than during good economic times. During a period of economic growth and in an optimistic environment, the yield spread between U.S. government bonds and corporate bonds will be higher than during an economic recession and a pessimistic environment