Which of the Following Statements Is Most Correct

question 8

Multiple Choice

Which of the following statements is most correct?

• A) Sinking fund provisions do not require companies to retire their debt; they only establish "targets" for the company to reduce its debt over time.
• B) Sinking fund provisions sometimes work to the detriment of bondholders - particularly if interest rates have declined over time.
• C) If interest rates have increased since the time a company issues bonds with a sinking fund provision, the company is more likely to retire the bonds by buying them back in the open market, as opposed to calling them in at the sinking fund call price.
• D) Statements a and b are correct.
• E) Statements b and c are correct.

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Definitions:

Deepest Seafloor

The deepest parts of the ocean floor, often found in trenches and abyssal plains, with the Mariana Trench being the deepest known point.

Hot Spots

Locations on the Earth's surface that have experienced extensive volcanic activity, typically situated above a stationary plume of hot mantle material.

Hot Spots

Areas of the Earth's mantle that are anomalously hot compared to surrounding areas, causing volcanic activity on the surface.

Linear Island Chains

Linear arrangements of islands, often volcanic, aligned along a single submarine ridge due to tectonic activity.