What type of bond is secured by various assets of the issuing firm?

The correct answer is mortgage bond, which is a type of bond that is secured by specific assets of the issuing firm. This means that if the issuer defaults on the bond, the bondholders have a claim to the collateral assets specified in the bond agreement. Typically, these assets can include properties or real estate owned by the firm. The presence of collateral makes mortgage bonds less risky for investors compared to unsecured types of bonds.

In contrast, a debenture bond is not secured by any specific assets; it is backed only by the creditworthiness of the issuer. This generally makes debenture bonds riskier than mortgage bonds. A zero coupon bond does not pay periodic interest but is issued at a discount to its face value, meaning there is no direct security involved in the asset sense. Similarly, a convertible bond provides the option to convert the bond into a specified number of shares, but it does not inherently include asset backing like a mortgage bond does.

Therefore, mortgage bonds stand out by offering an additional layer of security through the backing of tangible assets, which can lower the risk profile for investors.