Protective Covenants

question 390

Multiple Choice

Protective covenants:

• A) Are primarily designed to protect the issuing corporation from unreasonable demands of bondholders.
• B) Are consistent for all bonds issued by a corporation within Canada.
• C) Are limited to stating actions which a firm must take.
• D) Only apply to bonds that have a deferred call provision.
• E) Are primarily designed to protect bondholders from future actions of the bond issuer.

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Definitions:

Insider Trading

The illegal practice of trading on the stock exchange to one's own advantage through having access to confidential information.