Which One of the Following Statements Concerning Covenants Is Incorrect

question 243

Multiple Choice

Which one of the following statements concerning covenants is incorrect?

• A) Covenants are clauses in bank credit agreements and bond indentures designed to assure debt holders that the creditworthiness of the borrower(s)/issuer(s) will remain satisfactory
• B) Covenants must be tailored to reflect the specific needs of the borrower/issuer and the specific risks perceived by the debt holders.
• C) Covenants require the holder of the debt to refrain from doing certain specific things.
• D) Three different types of covenants in credit agreements and bond indentures are affirmative, negative and financial.

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Definitions:

Widow's Peak

A V-shaped point on the human forehead hairline due to a specific genetic trait.

Straight Hairline

A form of hairline where the hair grows in a straight line across the forehead.

Recessive

A genetic trait that is expressed only when two copies of the gene are present, not seen when a dominant gene is present.

Phenotypic Ratio

The proportion of different phenotypes observed in the offspring of a particular genetic cross.