Sinking fund bonds:
A) Require equal payments of both principal and interest over the life of the bond issue.
B) Require the issuer to set aside assets at specified amounts to retire the bonds at maturity.
C) Decline in value over time.
D) Are bearer bonds.
E) Are registered bonds.

Question

Quizplus · Accepted Answer

Sinking fund bonds require the issuer to set aside assets at specified amounts to retire the bonds at maturity. This ensures that the issuer will be able to meet its obligation to repay the bondholders.

Sinking Fund Bonds