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Which of the Following Statements Is TRUE

Question 3

Multiple Choice

Which of the following statements is TRUE?


A) Protective covenants are clauses that restrict the actions of the issuer.
B) Convertible bonds are debt instruments that can be converted into preferred shares at predetermined conversion prices.
C) Sinking fund provisions require the trustee to set money aside each year so that funds are available at maturity to pay off the debt.
D) Purchase fund provisions require the repurchase of a certain amount of debt only if it can be repurchased at or above a given price.

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