11-8 Unsecured debt is considered to be senior to secured debt.

Name: 11-8 Unsecured debt is considered to be senior to secured debt.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

This statement is false. Secured debt is considered to be senior to unsecured debt because it is backed by collateral that the lender can seize in case the borrower defaults on their payments. Unsecured debt, on the other hand, is not backed by collateral, which makes it riskier for the lender and gives it a lower priority in case of default.

11-8 Unsecured Debt Is Considered to Be Senior to Secured