CFA Practice Question

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CFA Practice Question

In the U.S., an unsecured debt issue is commonly referred to as a(an) ______.

A. indenture
B. debenture
C. subordinated debenture
Correct Answer: B

However, a debenture in the U.K. is actually a secured bond.

User Contributed Comments 4

User Comment
johntan1979 Subordinated debenture is also known as junior debt: debt which ranks after other debts should a company fall into liquidation or bankruptcy.
ksaqib88 Why is it not called subordinated debenture since the question talks about unsecured debt?
Fabulous1 Because a subordinated debenture is not necessarily unsecured. It is just subordinated to the other claims that have to be satisfied first in case of bankruptcy
denisw123 US unsecured debt = debenture = denture = unsecured teeth.
Laugh all you want, but you will never forget what a debenture is.
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