Alternatives to the usual source of long-term bank funds that have the characteristics of both debt and equity are called:Question 2Select one:transferable certificates of depositpromissory notessubordinated notessecured debentures
Question
Alternatives to the usual source of long-term bank funds that have the characteristics of both debt and equity are called:Question 2Select one:transferable certificates of depositpromissory notessubordinated notessecured debentures
Solution
The correct answer is subordinated notes. These are a type of debt that ranks after other debts if a company falls into liquidation or bankruptcy. They have characteristics of both debt (fixed interest payments) and equity (potential for higher returns if the company does well).
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