Which of the Following Statements Is FALSE

question 80

Multiple Choice

Which of the following statements is FALSE?

• A)Covenants are restrictive clauses in a bond contract that limit the issuer from taking actions that may undercut its ability to repay the bonds.
• B)If the issuer fails to live up to any covenant, the issuer goes into bankruptcy.
• C)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.
• D)Bond agreements often contain covenants that restrict the ability of management to pay dividends.

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Definitions:

Eastern Europe

A region comprising countries on the Eastern part of the European continent, often characterized by its history under Soviet influence during the Cold War.

Arsenal of Democracy

A phrase used by President Franklin D. Roosevelt in 1940 to describe the United States' role in providing military equipment and supplies to countries fighting against Axis powers in World War II.

Military Materiel

Equipment, apparatus, and supplies used by armed forces for warfare.

Bracero Program

A series of agreements between the United States and Mexico, allowing temporary laborers from Mexico to work in the U.S. agriculture field between 1942 and 1964.