Which of the Following Statements Is False

question 43

Multiple Choice

Which of the following statements is false?

• A) If the issuer fails to live up to any covenant, the issuer goes into bankruptcy.
• B) The stronger the covenants in the bond contract, the less likely the issuer will default on the bond, and so the lower the interest rate investors will require to buy the bond.
• C) Covenants are restrictive clauses in a bond contract that limit the issuer from taking actions that may undercut its ability to repay the bonds.
• D) Bond agreements often contain covenants that restrict the ability of management to pay dividends.

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Definitions:

Explanatory Variable

A factor in a statistical model that is believed to cause or influence changes in a response variable.

Graduate Internships

Work experience placements offered to students or recent graduates to gain professional skills in their field of study.

Standard Error

A measure of the variability or dispersion of a sampling distribution.

Sampling Distribution

The distribution of chances related to a statistic that comes from drawing a significant number of samples from a particular group of people or items.