Finra Exam Series-6 Topic 6 Question 101 Discussion

Actual exam question for Finra's Series-6 exam

Question #: 101
Topic #: 6

Rank the following entities with regard to the priority of their claims on a firm-from the highest priority to the lowest priority-in the event of bankruptcy.

i. common shareholders

ii. preferred shareholders

iii. secured bondholders

IV. debenture holders

AIII, II, IV, I

BII, III, I, IV

CIII, IV, II, I

DIV, III, II, I

Show Suggested Answer

Suggested Answer: C

Choice C correctly ranks the entities with regard to the priority of their claims on the firm in the event of bankruptcy, from the highest priority to the lowest priority. Secured bondholders get paid first, then debenture (unsecured bond) holders, followed by preferred shareholders. Common shareholders come in last.

by Rozella at May 01, 2025, 05:17 AM

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Margarita

1 months ago

I agree with Ty, secured bondholders should have the highest priority

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Moira

1 months ago

I'm not sure, but I think preferred shareholders should have higher priority

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Dona

1 months ago

I disagree, I believe the answer is D) IV, III, II, I

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Samira

1 months ago

Ah, the good old bankruptcy priority question. I bet the exam writer is trying to trick us with this one. I'm going with C, just to be safe.

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Peggie

1 months ago

Haha, this question is a classic! I remember studying this in my finance class. The answer is definitely C, III, IV, II, I.

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Gennie

16 days ago

Yes, secured bondholders have the highest priority followed by debenture holders, preferred shareholders, and then common shareholders.

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Chara

30 days ago

I remember this from my finance class too. It's important to know the priority of claims in bankruptcy.

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King

1 months ago

I think the correct answer is C, III, IV, II, I.

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Pansy

1 months ago

The priority order is definitely III, IV, II, I. Secured bondholders are the top priority, and common shareholders are the lowest.

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Delsie

2 months ago

Hmm, I'm not sure about that. I think the order might be III, II, IV, I, but I'll have to double-check my notes.

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Brent

1 months ago

I believe the priority order is III, IV, II, I. It's important to double-check though.

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Brent

1 months ago

That's a good guess, but I think the correct order is II, III, I, IV.

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Keneth

2 months ago

I think the correct answer is C. Secured bondholders have the highest priority, followed by debenture holders, preferred shareholders, and common shareholders.

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