Evaluate Bond Risk Features
Securities Industry Essentials SIE · Flashcards · Application
SECURITIES INDUSTRY ESSENTIALS SIE · FLASHCARDS
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QUESTION
Which has higher credit risk: a subordinated debenture or a senior secured bond?
QUESTION
Which typically has lower credit risk: a secured bond or a debenture?
QUESTION
Which has higher credit risk: a
B
B
BB
B
B
rated bond or an
A
A
A
rated bond?
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ANSWER
B
B
BB
B
B
rated bond. Lower ratings like
B
B
BB
B
B
signal weaker credit profiles and higher default probabilities than investment-grade
A
A
A
ratings.
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