A___________ is a restrictive provision on a bond which provides for the systematic retirement of the bonds prior to their maturity.

Question

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A sinking-fund requirement is a provision on a bond that requires the issuer to retire a portion of the bonds each year prior to their maturity. This systematic retirement helps to reduce the risk of default and provides investors with some measure of protection. The sinking fund is typically funded by the issuer setting aside a portion of their earnings each year to retire the bonds.

A___________ Is a Restrictive Provision on a Bond Which Provides