Which of the following terms applies to a bond issue for which the issuer puts money aside at regular intervals for the purpose of redeeming the bonds?

Question

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A sinking fund is a provision in a bond indenture that requires the bond issuer to set aside money at regular intervals for the purpose of redeeming the bonds. This reduces the issuer's default risk and provides investors with a greater sense of security. Serial refers to bond issues that mature in installments over a period of time, while default refers to a situation where the issuer fails to make the required interest or principal payments on the bond. Low-coupon bonds have a lower interest rate, while convertible bonds can be converted into a specific number of shares of the issuer's common stock.

Which of the Following Terms Applies to a Bond Issue