Question

Choose the word which best expresses the meaning of the italicized bold part of the sentence:
Before finalising this transaction, I had to sign an indemnity bond.

• A. a compensation bond
• B. a security bond
• C. a partnership bond
• D. a reparation bond

Answer 1

Answer: (B)

Option B: 'Indemnity' means 'security or protection against a loss or financial burden'.

'Security' means 'protection from a person or organisation'.

This word means the same as the given italicized word. Hence option B is correct.

Option A: 'Compensation' means 'something, typically money, awarded to someone in recognition of loss, injury or suffering'.

Option C: 'Partnership' means 'an association of two or more people'.

Option D: 'Reparation' means 'making amends for a wrong one has done, by providing payment or assistance to those who have been wronged'.

These words do not mean the same as the given word 'indemnity'.

So, options A, C and D are wrong.