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A requirement in the bond indenture that the corporation cannot invest in highly speculative projects is an example of a(n) ______ covenant.

a) Financial
b) Negative
c) Positive
d) Restrictive

User MoreON
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Final answer:

The requirement in a bond indenture preventing investment in highly speculative projects is an example of a negative covenant, designed to protect bondholders by limiting certain corporate actions.

Step-by-step explanation:

A requirement in the bond indenture that the corporation cannot invest in highly speculative projects is an example of a negative covenant. This type of covenant restricts certain actions by the corporation in order to protect the interests of the bondholders. Negative covenants are often included in the terms of a bond to prevent the borrower from engaging in risky activities which could compromise their financial stability and ability to make interest payments or repay the principal on the bond.

User Micer
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