Why Do Bonds Often Include Covenants

question 59

Multiple Choice

Why do bonds often include covenants?

• A)To reduce information asymmetry.
• B)To reduce moral hazard.
• C)To compensate for value-added services.
• D)To ensure repayment of the bond.

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Definitions:

G. Stanley Hall

An American psychologist and educator who is considered one of the founding figures of child psychology and educational psychology.

Psychological Research Laboratory

A controlled environment where experiments are conducted to study human behavior and cognitive processes.

Structuralist

An approach in various academic disciplines that explores the underlying structures that govern phenomena or concepts.

Conscious Reactions

Responses that involve awareness and deliberate thought.