Asked by Angel Martinez on Jun 20, 2024
Verified
Provide an appropriate definition of protective covenant.
Protective Covenant
A clause in a financial contract that restricts certain actions of the borrower to protect the lender's interests.
- Clarify and detail the significance of interest rate risk premium, liquidity premium, and protective covenants.
Verified Answer
DR
Dariela RondonJun 24, 2024
Final Answer :
Limitation placed on certain transactions that can be taken during the term of the loan, usually to protect the lender's interest.
Learning Objectives
- Clarify and detail the significance of interest rate risk premium, liquidity premium, and protective covenants.
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