_____________ Is an Account into Which Periodic Payments Are Made

question 179

Multiple Choice

_____________ is an account into which periodic payments are made for the purpose of retiring a bond issue.

• A) An indenture.
• B) A debenture.
• C) A covenant.
• D) A call option.
• E) A sinking fund.

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Definitions:

Present Value

Present Value is the current worth of a future sum of money or stream of cash flows given a specified rate of return.

Earnings Rate

The return on an investment or project expressed as a percentage of the cost, often used to measure profitability.

Present Value Factor

A multiplier used to determine the present value of a future cash flow, taking into account a specific discount rate.

Annuity

An investment vehicle providing a constant flow of payments to the owner, usually utilised as a source of income for retired people.