- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 47. Fundamentals of Credit Analysis
- Subject 2. Seniority Ranking and Priority of Claims
CFA Practice Question
In the event of bankruptcy, bondholders of ______ will get paid first.
A. a senior unsecured bond which is due in 10 years
B. a senior unsecured bond which is due in 10 days
C. They will have the same pro rata claim and the two bonds are treated as one class.
Explanation: This provision is referred to as bonds ranking pari passu in right of payment.
User Contributed Comments 1
| User | Comment |
|---|---|
| Sevigny | Don't you also have rankings as to when the bonds were issued? Older bond issues would have priority over more junior, no? |