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

Limited Time Offer

25%

Off

Get Premium Series-6 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Delsie

1 days 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.

upvoted 0 times

...

Keneth

19 days ago

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

upvoted 0 times

Scarlet

3 days ago

I agree with you, secured bondholders should have the highest priority.

upvoted 0 times

...

Ty

23 days ago

I think the answer is C) III, IV, II, I

upvoted 0 times

...