Which of the Following Is Not a Common Restrictive Covenant

question 3

Multiple Choice

Which of the following is not a common restrictive covenant included in bond indentures to reduce risk to the investor?

• A)Maintenance of designated thresholds measured by financial ratios
• B)Requirements that the names and addresses of the bondholders be registered with the bond issuer
• C)Restrictions on future borrowing activities
• D)Limitations on the payment of dividends

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Definitions:

Futures Exchanges

Marketplaces where futures contracts and options on futures contracts are traded, facilitating the buying and selling of commodities or financial instruments at a predetermined future date.

Delivery Date

The specific date on which a financial transaction, especially pertaining to futures or options contracts, is scheduled to be settled or executed.

Futures Contracts

Standardized agreements to buy or sell a particular commodity or financial instrument at a predetermined price at a specified time in the future.

Actual Delivery

The physical exchange of an asset between seller and buyer or the completion of a transaction, as opposed to a contract being settled by other means.