True or False QuestionTrue or false: Subordinated debentures are less risky than mortgage bonds.True false question.TrueFalse

Step 1: Read the question carefully. The question is asking whether subordinated debentures are less risky than mortgage bonds.

Step 2: Understand the terms. Subordinated debentures are a type of debt instrument that ranks lower in priority compared to other debts in case of bankruptcy or liquidation. Mortgage bonds, on the other hand, are secured by specific assets, such as real estate.

Step 3: Analyze the statement. In general, subordinated debentures are considered to be riskier than mortgage bonds because they have a lower priority in the event of default or bankruptcy. This means that if a company goes bankrupt, mortgage bondholders have a higher chance of recovering their investment compared to subordinated debenture holders.

Step 4: Determine the answer. Based on the analysis, the statement "Subordinated debentures are less risky than mortgage bonds" is FALSE.

Step 5: Provide the answer. The answer to the true or false question is FALSE. Subordinated debentures are generally considered to be riskier than mortgage bonds.