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Basic Question 9 of 9
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
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. |
I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach
Learning Outcome Statements
describe the contents of a bond indenture and contrast affirmative and negative covenants
CFA® 2024 Level I Curriculum, Volume 4, Module 1.