1 . What are loan covenants ?" How do these compare to guarantees , PledEES and warrants ?" (5 marks ) 2. What are bond rating agencies ?" Provide an example . What type Of risk are bond agencies most CONCERNed with when they rate a company's bonds ? Why ? Finally , provide an example of an Entity* whose bonds are rated . 15. mark's ) 3. Tommy told Betty what he learned in finance class today ." Did you know , Betty , that the feature Of a bond where the issuer can redeem the bond from the holder in exchange for the face amount plus . in most Cases , a premium is called a"sinking fund " provision " . Betty Said , " what are you talking about ! That is called a repo provision !" What do you think ? Who is right - Tommy or Betty ? Or are they both right ? Or are both of them wrong ?" If both of them are wrong , what is it that Tommy and Betty are describing ?" (3 marks ) 4. Tim own Shares of Good LOE Inc . Tim's friend Jennifer told Tim ,' I heard that Good LOE Inc . IS BOINE to ISSUE convertible bonds - at a price that doesn't seem much different from non- convertible bonds ." When Tim heard this , he was mad . Jennifer , on the other hand , is a conservative investor who is very old and depends on a steady income . She was happy . Describe why Tim might be unhappy and Jennifer might be happy . ( marks )