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Which of the following statements is least likely correct regarding the trustee of a bond indenture?

A. It is appointed by the issuer, but acts in the fiduciary capacity with the bondholders.

B. In the event of default, the discretionary powers of the trustee decrease considerably..

C. The trustee can bring legal action against the issuer on behalf of thebondholders.

Accounting Cash Flow Forecasting Financial Reporting Financial Systems Finance
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Question added by Shahbaz Hayder , Group Head of Finance , Sharif Group of Companies
Date Posted: 2015/07/11
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Shahbaz Hayder
by Shahbaz Hayder , Group Head of Finance , Sharif Group of Companies

Option B is the right answer.

Shazia Anees
by Shazia Anees , Assistant Manager Finance , Arham Trading Company

B. In the event of default, the discretionary powers of the trustee decrease considerably.

Zehab Osman
by Zehab Osman , Accountant , Aldar Consultancy Co.

B--------------------------------------------------

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