CFA Practice Question

There are 490 practice questions for this study session.

CFA Practice Question

Subordinated debentures ______

A. are also known as senior debentures.
B. possess a claim on the issuer that is subordinated to other debentures.
C. are a type of senior bond.
D. possess a claim on the issuer that is above that of other debentures.
E. are also known as minor debentures.
Correct Answer: B

Subordinated (junior) debentures hold a claim on the income and assets of the issuer that is subordinated to that of other debentures. As such, they are not quite as secure for the bondholder as are other debentures.

User Contributed Comments 2

User Comment
johntan1979 No such thing as a minor debenture.
Antoinepo thanks john
You need to log in first to add your comment.