- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 1. Fixed-Income Instrument Features
- Subject 2. Bond Indenture
CFA Practice Question
In the U.S., an unsecured debt issue is commonly referred to as a(an) ______.
B. debenture
C. subordinated debenture
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. |