Which aspect of bond underwriting assesses the creditworthiness of the applicant?

The correct choice is focused on the aspect of character, which plays a crucial role in assessing the creditworthiness of an applicant during bond underwriting. Character refers to the applicant's reliability, integrity, and overall trustworthiness in meeting financial obligations. Underwriters evaluate this aspect by looking at the applicant's past credit history, payment habits, and reputation in the business community.

This assessment is vital because a strong character indicates that the applicant is likely to honor their commitments, making them a lower risk for the issuer of the bond. Evaluating character often includes reviewing references, previous performance, and any history of legal or financial troubles that could impact their ability to repay debts.

The other aspects of capital, capacity, and collateral also play roles in the overall assessment of creditworthiness. Capital refers to the financial resources available to the applicant, capacity looks at the applicant's ability to generate income or revenue to cover obligations, and collateral involves the assets that can be pledged as security for the bond. However, character is distinct as it addresses the qualitative nature of the applicant's trustworthiness, which is fundamental in bond underwriting decisions.