Incorrect. Because a sinking fund bond is a bond issue that has a provision to set aside cash to repay the bonds at the maturity date. What type of bonds in a particular bond issuance will not all mature on the same date? Sinking fund bonds. Term bonds. Serial bonds. Debenture bonds. Save for Later Attempts: 1 of 3 used Submit Answer
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The incorrect answer feedback states that a sinking fund bond is a bond issue that has a provision to set aside cash to repay the bonds at the maturity date. This implies that sinking fund bonds do not all mature on the same date. Show more…
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The value of a bond is its stated face value or maturity value, and its coupon interest rate is the stated annual interest rate on the bond. The maturity date is the date on which the par value must be repaid. A provision gives the issuer the right to redeem the bonds under specified terms prior to their normal maturity date, although not all bonds have this provision. Some bonds have provisions which require the issuer to systematically retire a portion of the bond issue each year. Because sinking fund provisions facilitate their orderly retirement, bonds with these provisions are regarded as being so they will have coupon rates than similar bonds without these provisions.
Akash M.
Adi S.
A bond's yield refers to the interest payment or payments paid by a bond. A bond issuer is said to be in default if it does not pay the interest or the principal in accordance with the terms of the indenture agreement or if it violates one or more of the issue's restrictive covenants. A bond contract feature that requires the issuer to retire a specified portion of the bond issue each year is called a sinking fund. A bond's call provision gives the issuer the right to call, or redeem, a bond at specific times and under specific conditions.
Madhur L.
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