Interest only, sinking fund, and balloon are
A) types of repayment.
B) types of maturities.
C) investment strategies.
D) types of stock.

Question

Quizplus · Accepted Answer

Interest only, sinking fund, and balloon are types of repayment methods used in finance, particularly in the context of loans and bonds. Interest-only payments involve paying only the interest on the principal balance, with the principal amount remaining unchanged. A sinking fund is a method where a borrower sets aside funds over time to repay the debt in the future. A balloon payment involves paying off the principal balance or a large portion of the balance in a lump sum at the end of the loan term.

Interest Only, Sinking Fund, and Balloon Are