A debt obligation backed with collateral is best described as:
A) a debenture.
B) secured debt.
C) subordinated debt.
D) unsubordinated debt.

Question

Quizplus · Accepted Answer

Secured debt is a debt obligation that is backed by collateral, meaning if the borrower defaults, the lender can seize the collateral to recoup losses. A debenture, in contrast, is an unsecured debt not backed by specific assets. Subordinated debt refers to its priority in being repaid upon liquidation, not whether it is secured or unsecured. Unsubordinated debt has a higher claim than subordinated debt but does not indicate if it is secured or unsecured.

A Debt Obligation Backed with Collateral Is Best Described As