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

Margarita

2 days ago

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

upvoted 0 times

...

Moira

3 days ago

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

upvoted 0 times

...

Dona

6 days ago

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

upvoted 0 times

...

Samira

8 days 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.

upvoted 0 times

...

Peggie

9 days ago

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

upvoted 0 times

King

18 hours ago

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

upvoted 0 times

...

Pansy

14 days ago

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

upvoted 0 times

...

Delsie

17 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

Brent

17 hours ago

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

upvoted 0 times

...

Brent

4 days ago

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

upvoted 0 times

...

Keneth

1 months 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

Royal

12 days ago

I think preferred shareholders should come before debenture holders.

upvoted 0 times

...

Scarlet

19 days ago

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

upvoted 0 times

...

Ty

1 months ago

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

upvoted 0 times

...