Prerefunded bonds, also known as ________ bonds, are those in which the issuer makes annual deposits to a bank to accumulate funds for paying off the bonds on maturity.
A) junk
B) callable
C) convertible
D) serial
E) sinking-fund

Question

Quizplus · Accepted Answer

Prerefunded bonds are associated with a sinking fund, where the issuer deposits annual amounts into a bank to gather sufficient funds to repay the bond at maturity. This ensures financial security for the bondholders by setting aside money over time specifically for the bond's repayment.

Prerefunded Bonds, Also Known as ________ Bonds, Are Those in Which