Bonds whose indentures contain a provision which gives the issuing company the option to retire portions of the bond issue before maturity if it so desires, but the provision does not require the company to do so are called _____ bonds.
A)callable
B)refunded
C)sinking fund
D)serial
E)convertible

Question

Quizplus · Accepted Answer

A callable bond includes a provision that allows the issuer to retire portions of the bond issue before the maturity date, but there is no requirement for the company to do so. Refunded and sinking fund bonds have specific provisions for retiring portions of the bond issue before maturity, while serial bonds require a portion of the issue to be retired at regular intervals. Convertible bonds can be converted into a predetermined amount of the issuer's equity shares.

Bonds Whose Indentures Contain a Provision Which Gives the Issuing