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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