Which of the Following Statements Is True

question 61

Multiple Choice

Which of the following statements is true?

• A)An example of a covenant is a restriction that limits those actions of the borrower that have an impact on the probability of repayment.
• B)An example of a covenant is a restriction that encourages those actions of the borrower that have an impact on the probability of repayment.
• C)A covenant is a restriction written into either bond or loan contracts.
• D)All of the listed options are correct.

---

Definitions:

Financing Activities

Cash flow activities related to changes in the size and composition of the equity capital and borrowings of an entity.

Cash Receipts

The total amount of money received by a business during a specific period.

Interest and Dividends

Income received from investments, with interest earned on debt investments and dividends received from equity investments.

Operating Activities

Tasks and transactions directly related to the primary business functions of providing goods or services to customers.