What Are the Various Provisions Within a Bond Indenture That

question 95

Multiple Choice

What are the various provisions within a bond indenture that are designed to protect bondholders by restricting the actions of the issuer called?

• A)restrictive actions
• B)prohibitions
• C)negative conditions
• D)protective covenants
• E)restrictive amendments

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Definitions:

Needed Cash

The amount of liquidity a company or individual requires to meet immediate obligations or for short-term goals.

Commercial Paper

Commercial Paper is an unsecured, short-term debt instrument issued by corporations, typically for the financing of operating expenses and meeting short-term liabilities.

Maturity

The date when a financial instrument (like a bond) expires and the principal is to be paid back to creditors.

Annual Interest Rate

The percentage increase in money lent or invested over a one-year period, expressed as a percentage of the principal.