Which statement best describes an Exchange-Traded Note (ETN)?

An Exchange-Traded Note (ETN) is a type of unsecured debt instrument issued by financial institutions. It is designed to track the performance of a specific market index or benchmark and is traded on an exchange like a stock. The distinguishing feature of an ETN is that it is unsecured, meaning it does not have any collateral backing it. Investors rely on the issuer's creditworthiness for repayment at maturity, rather than any secured asset.

In this context, the characterization of an ETN as senior unsecured debt is accurate because it typically ranks higher than subordinated debt in the event of liquidation but does not have the security of specific assets backing it, making it different from secured debt instruments. The goal of an ETN is to provide investors with access to various asset classes without having to actually buy the underlying securities or commodities.