Indenture is defined as:

• A. The terms of a bond loan expressed in the indenture (also called a deed of trust).
• B. A mortgage document securing company assets.
• C. The agreement to issue new shares.
• D. The prospectus for a government bond.

Answer: (A)

An indenture is the written contract that governs a bond issue, laying out the loan’s terms, including principal, interest, maturity, covenants, and the duties of the issuer and the trustee, as well as the remedies if default occurs. It’s the document bonds investors rely on and is sometimes referred to as a deed of trust. The other options describe different instruments: a mortgage secures assets, which is not the bond contract; an agreement to issue new shares relates to equity rather than debt; and a government bond’s prospectus is a disclosure document, not the bond agreement itself.