A protective covenant:

Question $3$ options:

$1)$

guarantees that a bond will be repaid in full with interest.

$2)$

is designed to protect the bond dealer from potential legal liability related to the bond issue.

$3)$

prevents a bond from being called.

$4)$

protects the borrower from unscrupulous practices by the lender.

$5)$

limits the actions of the borrower.