Which One of the Following Statements Concerning Covenants Is Incorrect

Multiple Choice

Which one of the following statements concerning covenants is incorrect?

A) Covenants are clauses in bank credit agreements and bond indentures designed to assure debt holders that the creditworthiness of the borrower(s) /issuer(s) will remain satisfactory
B) Covenants must be tailored to reflect the specific needs of the borrower/issuer and the specific risks perceived by the debt holders.
C) Covenants require the holder of the debt to refrain from doing certain specific things.
D) Three different types of covenants in credit agreements and bond indentures are affirmative, negative and financial.