Best example of a negative covenant

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1. For plain vanilla bonds (e.g. bonds with no embedded options), price and yield are ___________ related, and the graphical relationship is _______________.

a. positive; linear

b. inverse; convex

c. positive; convex

d. inverse; concave

2. Which of the following is the best example of a negative covenant?

a. The firm cannot issue additional long-term debt

b. The company must furnish audited financial statements

c. The company must maintain its working capital at a predetermined level

d. The company must maintain collateral in good condition

Reference no: EM131566269

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