Question

Protective Covenants are:

A. restrictions or requirements placed on the borrower in a bond contract designed to protect the lenders

B. may specify that the borrower refrain from doing certain things, or require that they do certain things

C. All of the above

D. None of the above

Answer 1

Answer:

The correct answer is C. All of the above .

Explanation:

A protective covenant is there to ensure that the lenders interests are protected and that the recollect of the loan is possible.

Both of the answer a and b are expressing this in different ways.

Answer 2

Answer:

The correct answer is letter "C": All of the above.

Explanation:

A Protective Covenant is a term imposed on a loan or other form of debt arrangement that demands that the borrower maintain or even refrain from certain business activities. Covenants protect the borrowers from threats that they did not foresee when calculating the risk of the loan. Most loan agreements include a clause that the lender shall have the power to make the loan due and payable immediately if a covenant is violated.