Subordinated debentures
A) have a lower claim on assets than simple debentures.
B) are secured by some physical asset.
C) are financial assets held in trust by a third party.
D) are the safest form of corporate bonds.

Question

Quizplus · Accepted Answer

Subordinated debentures have a lower claim on assets and earnings than simple (senior) debentures in the event of the company's liquidation, making them riskier for investors. They are not secured by physical assets, held in trust by a third party, nor are they the safest form of corporate bonds.

Subordinated Debentures