In order to repay some corporate bonds, a firm may be required to deposit a specified sum of money each year until the bond's maturity in a sinking fund.

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This statement is true. Depositing a specified sum of money each year into a sinking fund is a common way for firms to ensure that they have the necessary funds available to repay corporate bonds at maturity. The sinking fund may be held in a separate account and managed by a trustee or custodian, and the firm may be required to make regular contributions to the fund until the bond matures.

In Order to Repay Some Corporate Bonds, a Firm May