Payment of interest required only when earnings are made available from which to make a payment is characteristic of a(n) ________.

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This characteristic is specific to income bonds, in which the payment of interest is dependent on the availability of earnings. Floating rate bonds have variable interest rates tied to a benchmark index. Mortgage bonds use real estate as collateral, and equipment trust certificates are used to finance the purchase of equipment.

Payment of Interest Required Only When Earnings Are Made Available