ACI
3I0-012 · Question #424
Which one of the following statements concerning covenants is incorrect?
The correct answer is C. Covenants require the holder of the debt to refrain from doing certain specific things. See the full explanation below for the reasoning.
Question
Which one of the following statements concerning covenants is incorrect?
Options
- ACovenants are clauses in bank credit agreements and bond indentures designed to assure debt holders
- BCovenants must be tailored to reflect the specific needs of the borrower/issuer and the specific risks
- CCovenants require the holder of the debt to refrain from doing certain specific things.
- DThree different types of covenants in credit agreements and bond indentures are affirmative, negative
How the community answered
(57 responses)- A4% (2)
- B7% (4)
- C77% (44)
- D12% (7)
Community Discussion
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