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NEW QUESTION: 2
What ensures that firms are not able to selectively default on some obligations without being considered in default on the others?
A. Exchange listing requirements
B. The bankruptcy code
C. Chapter 11 regulations
D. Cross-default clauses in debt covenants
Answer: D
Explanation:
Explanation
It is the cross-default clauses in debt agreements that generally provide that a default on one obligation is considered a credit event applying to all debts of the obligor, and therefore we are able to deal with credit risk at the borrower level, and not at the level of the individual security. It also helps avoid situations where borrowers can selectively default on some obligations while continuing to service others. Therefore Choice 'a' is the correct answer. The other choices are incorrect.
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High-risk operation" only includes software operations such as cutover in major projects, expansion, upgrade, transformation, network optimization, relocation, data change, etc. in the professional delivery, and does not include hardware operation content.
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