Sinking fund bonds:
A)Require the issuer to set aside assets in order to retire the bonds at maturity.
B)Require equal payments of both principal and interest over the life of the bond issue.
C)Decline in value over time.
D)Are registered bonds.
E)Are bearer bonds.

Question

Quizplus · Accepted Answer

Sinking fund bonds require the issuer to set aside assets in order to retire the bonds at maturity. This means that the issuer will make regular payments into a sinking fund, which will be used to redeem the bonds when they come due. This helps to ensure that the bonds will be paid off on time and reduces the risk of default.

Sinking Fund Bonds