Performance as _____________ is normally the only true trust relationship administered by a corporate trust department.
Click on the arrows to vote for the correct answer
A. B. C. D.A
The correct answer is C. Trust under a bond indenture.
A corporate trust department is responsible for administering various types of trust relationships, including trusts established under a bond indenture. A bond indenture is a legal agreement between a bond issuer and bondholders that outlines the terms of the bond, including the interest rate, maturity date, and other key provisions.
When a bond issuer establishes a trust under a bond indenture, they appoint a trustee to manage the trust on behalf of the bondholders. The trustee has a fiduciary duty to act in the best interests of the bondholders and to ensure that the terms of the bond indenture are followed.
The performance of the trustee in managing the trust is critical to the success of the bond issue, as it impacts the ability of the bond issuer to meet its obligations to the bondholders. Therefore, the performance of the trustee as the administrator of the trust is the only true trust relationship administered by a corporate trust department.
Option A, Trustee under a bond indenture, is incorrect because it is already specified in the question stem and cannot be the answer to the question itself.
Option B, Bank under a bond indenture, is incorrect because banks can also act as bond issuers or underwriters, and in those roles, they have additional responsibilities beyond those of a trustee.
Option D, None of these, is incorrect because as explained above, the performance of the trustee as the administrator of the trust is the only true trust relationship administered by a corporate trust department.