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

Question

Quizplus · Accepted Answer

Sinking fund bonds require the issuer to set aside specific assets over time to retire the bonds at maturity. This provides additional security to bondholders that the issuer will have sufficient funds to repay the debt upon maturity.

Sinking Fund Bonds