A borrower agreeing to have an annual audit of its financial statements is an example of a positive covenant.

Name: A borrower agreeing to have an annual audit of its financial statements is an example of a positive covenant.
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Question

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A positive covenant in a loan agreement requires the borrower to perform specific actions, such as maintaining financial ratios or undergoing annual audits, to ensure the borrower's financial stability and ability to repay the loan.

A Borrower Agreeing to Have an Annual Audit of Its