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    Secured vs. Unsecured Debt

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    Match the yield to maturity in column 2 with the security provisions (or lack thereof) in column 1. Higher returns tend to go with greater risk.

    (1) Security Provision (2) Yield to Maturity

    a. Debenture a. 6.85%
    b. Secured Debt b. 8.20%
    c. Subordinated Debenture c. 7.76%

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    Solution Preview

    In terms of risk, a subordinated debenture is most risky since it is unsecured and is also ...

    Solution Summary

    The solution explains the relationship between YTM and secured and unsecured debt