Protective Covenants

question 40

Multiple Choice

Protective covenants

• A)are primarily designed to protect bondholders from future actions of the bond issuer.
• B)only apply to bonds that have a deferred call provision.
• C)are limited to stating actions that a firm must take.
• D)are consistent for all bonds issued by a corporation within the United States.
• E)are designed to protect the issuer should it default.

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Definitions:

Gastrointestinal

Referring to the stomach and intestines, and related to the process of digestion and the management of diseases affecting this system.

Upper Respiratory

Pertaining to the upper part of the respiratory system, including the nose, throat, and trachea.

Seriation

Ability to order items along a dimension.

Class Inclusion

Understanding of the relationship between a whole and its parts.