Protective Covenants

question 33

Multiple Choice

Protective covenants:

• A) apply to short-term debt issues but not to long-term debt issues.
• B) only apply to privately issued bonds.
• C) are a feature found only in government-issued bond indentures.
• D) only apply to bonds that have a deferred call provision.
• E) are primarily designed to protect bondholders.

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Definitions:

Tax Return Form

The document or electronic form used to report income, deduct expenses, and calculate taxes owed or refunded by the taxpayer.

Taxpayer

An individual or entity that is obligated to pay taxes to a federal, state, or local government body.

Dependent Child

A child who relies on a parent or guardian for financial support and meets certain IRS criteria, enabling the parent to claim tax benefits.

Negligence

Failure to take proper care in doing something, resulting in damage or injury to another.