The Purpose of a Sinking Fund Is To

question 226

Multiple Choice

The purpose of a sinking fund is to:

• A) Distribute the proceeds received from a bond issue over a period of time.
• B) Gather funds so that sufficient money is available when the bond issue matures to pay off the debt.
• C) Distribute the interest payments to the individual bondholders.
• D) Retire part or all of a bond issue prior to maturity.
• E) Retain the interest that accrues on zero-coupon bonds.

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Definitions:

Intoxicated

The condition of having physical and mental faculties impaired by an excess of alcoholic drink or any substance, leading to altered mood, behavior, and coordination.

Psychoactive Drugs

Substances that alter perception, mood, consciousness, or behavior by affecting the brain's chemistry.

Synapse

Spatial junction between one neuron and another; forms the information transfer site between neurons.

Nicotine

A stimulant and addictive substance found in tobacco products that affects the nervous system.