Which of the Following Statements Is FALSE

question 56

Multiple Choice

Which of the following statements is FALSE?

• A) If a bond issuer fails to live up to any covenant, the issuer goes into bankruptcy immediately.
• B) The stronger the covenants in the bond contract, the less likely an 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:

Brain Injury

Any injury occurring to the brain of a living organism that can result in impairment or dysfunction of the brain, ranging from mild alterations of consciousness to an unresponsive state.

Biorhythms

Biological cycles or patterns inherently present in living organisms that regulate various physiological processes and behavioral responses.

Daily

Pertaining to the frequency or routine that occurs every 24 hours, often used in the context of daily activities or habits.

Sleeping

A natural and periodic state of rest for the mind and body, characterized by altered consciousness and reduced sensory and muscle activity.