Q17 Subordinated debentures are more risky than unsubordinated debentures because the claims of subordinated debenture holders are less likely to be honored in the event of liquidation. A) True B) False Q18 If a firm were to experience financial insolvency, the legal system provides for an order of hierarchy for payment of claims. Assume that a firm has the following outstanding securities; mortgage bonds, common stock, debentures, and preferred stock. In what position would investors be that own mortgage bonds to have their claim paid? A) First B) Second C) Third D) Fourth Q19 The par value of a corporate bond indicates the payment that the issuer promises to make to the bondholder at maturity. A) True B) False