CFA Institute Exam ESG-Investing Topic 7 Question 10 Discussion

Actual exam question for CFA Institute's ESG-Investing exam

Question #: 10
Topic #: 7

[All ESG-Investing Questions]

Compared to equities, bonds most likely:

Ahave an infinite maturity.

Bhave a wider range of issuers.

Care inferior in the capital structure.

Show Suggested Answer

Suggested Answer: C

Bonds are typically considered inferior in the capital structure compared to equities, meaning bondholders are paid after senior debt but before equity holders in the event of a liquidation. (ESGTextBook[PallasCatFin], Chapter 8, Page 451)

by Matt at Feb 12, 2025, 07:18 PM

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Amalia

4 months ago

Wait, bonds are inferior in the capital structure? Sounds like someone's been watching too many finance movies.

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Ernie

3 months ago

B) have a wider range of issuers.

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Jerry

3 months ago

A) have an infinite maturity.

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Willard

4 months ago

Bonds have a finite maturity, not an infinite one. I thought that was common knowledge.

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Sanjuana

3 months ago

Bonds have a finite maturity, not an infinite one. I thought that was common knowledge.

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Felix

3 months ago

A) have an infinite maturity.

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Carmela

4 months ago

But equities represent ownership in a company, which can be more risky than bonds.

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Eleonore

4 months ago

Bonds definitely have a wider range of issuers than equities. I mean, who doesn't love a good government bond?

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Jennie

3 months ago

Government bonds are a popular choice for many investors.

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Ling

3 months ago

C) are inferior in the capital structure.

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Samira

3 months ago

B) have a wider range of issuers.

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Elouise

4 months ago

A) have an infinite maturity.

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Nada

4 months ago

I agree, that's because bonds can be issued by governments and corporations.

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Tyisha

4 months ago

Bonds have a wider range of issuers.

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