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A Protective Covenant

Question 5

Multiple Choice

A protective covenant:


A) protects the borrower from unscrupulous practices by the lender.
B) guarantees the interest and principal payments will be paid in full on a timely basis.
C) prevents a bond from being called.
D) limits the actions of the borrower.
E) guarantees the market price of a bond will never be less than par value.

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