Which of the following is a type of call provision?

Question

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A sinking fund is a type of call provision that requires the issuer to set aside funds each year to redeem a portion of the bond issue, which is then retired over time. This reduces the issuer's risk of default and provides investors with some assurance that they will receive their principal back at maturity or through early redemption. Balloon payments, conversion features, indentures, and bond covenants are not types of call provisions, but rather other aspects of bond contracts.

Which of the Following Is a Type of Call Provision