What Is an Advantage of a Loan Covenant to the Borrower

question 24

Multiple Choice

What is an advantage of a loan covenant to the borrower?

• A) Greater security against risk exposure.
• B) Greater clarity with respect to repayment terms.
• C) A more appealing debt issue to the lender.
• D) Increased opportunity for subordinate loans.
• E) The option for early loan repayment.

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Definitions:

Just-World Hypothesis

The cognitive bias that a person's actions are inherently inclined to bring morally fair and fitting consequences to that person.

Ethnocentrism

The belief that one’s own ethnic group, nation, or religion is superior to all others.

Interdependence

A relationship between entities where each is mutually dependent on the other, often used to describe economic or ecological systems.

Acculturation

The process of adopting the cultural traits or social patterns of another group, especially by contact and interaction.