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.

---

Definitions:

Ball Court

A specific area designated for playing ball games, often found in ancient Mesoamerican sites, used for religious and social activities.

Mesoamerican Cultures

Refers to the various civilizations that flourished in Mexico and Central America before Spanish colonization, including the Aztec and Maya.

Circular Temple

A temple characterized by its circular layout, often used in ancient architecture and religious structures.

West Mexican Tombs

Refers to the ancient burial sites found in Western Mexico, notable for their elaborate shaft tombs, often rich in artifacts and ceramics.