Sinking fund arrangements are least apt to contain which one of these requirements?
A)A deferred provision for the first few years
B)A one-time repayment of the entire principal and interest at maturity
C)A balloon payment
D)Equal payments of principal over the life of the bond
E)Sufficient payments over the bonds' life to retire the entire bond issue

Question

Quizplus · Accepted Answer

Sinking fund arrangements typically require periodic payments over the life of the bond to retire the entire bond issue. Option B suggests a one-time repayment of the entire principal and interest at maturity, which is not a typical requirement for a sinking fund arrangement.

Sinking Fund Arrangements Are Least Apt to Contain Which One