Which of the Following Refers to Restrictions in Loan and Bond

question 106

Multiple Choice

Which of the following refers to restrictions in loan and bond agreements that encourage or forbid certain actions by the borrower?

• A)Mortality rates.
• B)RAROC.
• C)Implicit contracts.
• D)Covenants.
• E)Credit rationing.

---

Definitions:

Marginal Utility

The additional satisfaction or utility a consumer gains from consuming one more unit of a good or service.

Competitive Equilibrium Price Ratio

The ratio of prices that ensures the equality of supply and demand in a competitive market, often used to observe relative price changes between commodities.

Utility Function

A mathematical representation expressing an individual's preference ordering over a set of goods or services, used in economics to model decision making under uncertainty.

Min

Often short for "minimum," it represents the smallest or least possible amount or degree of a certain quantity or measure.