Which of the Following Statements Regarding Sinking Fund Provisions Is

question 32

Multiple Choice

Which of the following statements regarding sinking fund provisions is FALSE?

• A) Sinking fund provisions usually specify a minimum rate at which the issuer must contribute to the fund.
• B) With a sinking fund, instead of repaying the entire principal balance on the maturity date, the company makes regular payments into a sinking fund administered by a trustee over the life of the bond.
• C) With a sinking fund, if a bond is trading at below its face value, because the bonds are repurchased at par, the decision as to which bonds to repurchase is made by lottery.
• D) Because the sinking fund allows the issuer to repurchase the bonds at par, the option to accelerate the payments is another form of call provision.

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Definitions:

Functionalist

Pertains to a perspective in sociology and psychology that emphasizes the importance of the roles that elements of society or cognition serve.

Psychology

The scientific study of the mind and behavior, examining how individuals think, feel, and act both as individuals and within groups.

Structuralism

Structuralism is a theoretical paradigm in psychology and other social sciences that emphasizes the analysis of underlying structures in cultural products, human thought, and behavior.

Components of Taste

The five recognized basic tastes perceived by taste receptors: sweet, sour, salty, bitter, and umami.