Which of the following bonds offers the most security to the bondholder?

Question

Quizplus · Accepted Answer

Senior mortgage bonds are backed by a first priority claim on the assets of the issuer, specifically the mortgaged property. This means that these bondholders have the highest priority in case of bankruptcy, making them the most secure bonds. Junior mortgage bonds have a lower priority claim on the assets, debenture bonds are unsecured, and income bonds only pay interest if the issuer has sufficient income, making them less secure.

Which of the Following Bonds Offers the Most Security to the Bondholder