CFA Practice Question

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CFA Practice Question

Which of the following would not be considered an example of a typical negative covenant of a loan document?

A. The firm may not merge with another firm.
B. The firm may not pledge its assets to another lender.
C. Limitations are put on the amounts of dividends the firm may pay.
D. The firm may not sell or lease its major assets without prior approval by the lender.
E. The firm must furnish periodic financial statements to the lender.
Correct Answer: E

User Contributed Comments 4

User Comment
Gina = an affirmative covenant
sunilcfa I thought it was A, B, C and D. The answer none of them :(

Oh I made a mistake. The question asks "would not be -ve".

Reminded me of a very old principle: Read Question properly. :)
saji I got it right!!!
being careful is a big help
chesschh affirmative = must
negative= may, restriction
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