Which of the about loan covernant is true

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Problem 1: Which of the following about loan covernant is/are TRUE? (One or more than one options may be correct.)

Select one or more:

a. For the lender, loan covenants are usually used as a security measure to make sure there is enough cash flow or stability with the borrowing party so that they are able to pay back the loan.

b. A loan covenant is a legal clause in a borrowing contract that requires the borrower to either take certain actions or avoid certain actions.

c. The existence of covenants in a loan issue increase the risk of the loan.

d. Loan covenants are rarely used in commercial loans but often used in consumer loans.

Reference no: EM132973448

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