- CFA Exams
- CFA Level I Exam
- Topic 8. Alternative Investments
- Learning Module 3. Investments in Private Capital: Equity and Debt
- Subject 2. Private Debt Investment Characteristics
CFA Practice Question
In a typical leveraged buyout deal, the leveraged loans are generally:
B. senior unsecured debt.
C. junior debt similar to high yield bonds.
A. senior secured debt.
B. senior unsecured debt.
C. junior debt similar to high yield bonds.
Correct Answer: A
High yield bonds typically are unsecured subordinated debt while leveraged loans are senior secured debt.
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