When a Borrower Violates a Loan Covenant That Requires Minimum

question 112

Multiple Choice

When a borrower violates a loan covenant that requires minimum achievement of an accounting measure in the financial statements,the lender can

• A)immediately seize the loan collateral.
• B)fire the chief operating officer of the borrower.
• C)report the borrower to the IRS.
• D)call for immediate repayment of the loan.

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Definitions:

Intoxicated

A state of being under the influence of drugs or alcohol to the extent that mental and physical capacities are significantly impaired.

Written Agreement

A contract or agreement that is documented and signed on paper or in digital form, outlining the terms and conditions agreed upon by the parties.

Incapacitated

A state where an individual is unable to make their own legal, financial, or health decisions due to physical or mental limitations.

Porsche Automobile

A brand of high-performance sports cars and SUVs manufactured by the German company Porsche AG.