designated bonds
payable bonds
ordinate bonds
subordinated bonds
Answer is Right!
Answer is Wrong!
The correct answer is: D. subordinated bonds.
Subordinated bonds are a type of unsecured bond that ranks below other types of debt, such as secured bonds and mortgages, in the event of a bankruptcy. This means that if the company defaults on its debt, the holders of subordinated bonds will be the last to receive any repayment.
Subordinated bonds are often issued by companies that have a high level of debt or that are considered to be a higher risk investment. They can offer a higher interest rate than other types of bonds, as investors are compensated for the increased risk.
Here is a brief explanation of each option:
- A. Designated bonds are not a specific type of bond. This option is incorrect.
- B. Payable bonds are a type of short-term debt that is due within one year. This option is incorrect.
- C. Ordinate bonds are not a specific type of bond. This option is incorrect.
- D. Subordinated bonds are a type of unsecured bond that ranks below other types of debt, such as secured bonds and mortgages, in the event of a bankruptcy. This option is correct.