Covenants allow the lenders to control the activities of the borrower to protect themselves for the agency problem between the lenders and the loan created by the loan. Without these provisions, the borrower could take advantage of the lender by investing in riskier projects without compensating lenders with high interest rate on their loans
Dana05 answered the question on July 18, 2019 at 19:23
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Differentiate between the primary and the secondary markets in the issuance of shares
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Differentiate between the primary and the secondary markets in the issuance of shares
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July 18, 2019
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Distinguish between equity and debt
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July 18, 2019
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Discuss contingent financial instruments and give an example
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July 18, 2019
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What are the specifications of a negative covenant?
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July 15, 2019
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What are the specifications of a positive covenant?
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July 15, 2019
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July 15, 2019
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What are the items included in the long term loan agreements?
Date posted:
July 15, 2019
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A bond has a market price of 500 shillings. It promises to a coupon payment of 15% per annum at the end of each year...
(Solved)
A bond has a market price of 500 shillings. It promises to a coupon payment of 15% per annum at the end of each year for two years. If the face value of the bond is 1000. Find the current yield to maturity
Date posted:
July 15, 2019
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What is the meaning of yield to maturity?
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July 15, 2019
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Date posted:
July 15, 2019
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Give the definition of fixed income securities
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July 15, 2019
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State the three main participants in the derivatives market
Date posted:
July 15, 2019
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Briefly explain the factors affecting option prices
Date posted:
July 15, 2019
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Briefly discuss the features of options
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July 15, 2019
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(Solved)
What are the problems that are associated with marking to the markets?
Date posted:
July 15, 2019
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(Solved)
Distinguish between forwards contract and futures contract
Date posted:
July 15, 2019
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Differentiate between the long party and the short party in a futures contract
Date posted:
July 15, 2019
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Describe the three main types of derivatives
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July 15, 2019
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Highlight the characteristics of derivatives
Date posted:
July 15, 2019
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Give the uses of derivatives
Date posted:
July 15, 2019
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