You Are Considering Two Bonds

question 55

True/False

You are considering two bonds. Both are rated double A (AA), both mature in 20 years, both have a 10 percent coupon, and both are offered to you at their $1,000 par value. However, Bond X has a sinking fund while Bond Y does not. This is probably not an equilibrium situation, as Bond X, which has the sinking fund, would generally be expected to have a higher yield than Bond Y.

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Definitions:

Politically Active Colonists

Early American settlers who engaged in actions or movements to influence policies or leadership.

Segregated Units

Military or civilian groups that are divided based on race, gender, or other criteria, historically prevalent in various contexts including the U.S. armed forces.

George Washington

The first President of the United States, serving from 1789 to 1797, and a key leader in the American Revolutionary War.

Sons of Liberty

A secret organization of American colonists formed to protest British policies and fight for independence, famous for their role in events like the Boston Tea Party.