Which of the Following Statements Is CORRECT

question 41

Multiple Choice

Which of the following statements is CORRECT?

• A)Sinking fund provisions sometimes turn out to adversely affect bondholders, and this is most likely to occur if interest rates decline after the bond has been issued.
• B)Most sinking funds require the issuer to provide funds to a trustee, who saves the money so that it will be available to pay off bondholders when the bonds mature.
• C)A sinking fund provision makes a bond more risky to investors at the time of issuance.
• D)Sinking fund provisions never require companies to retire their debt; they only establish "targets" for the company to reduce its debt over time.
• E)If interest rates have increased since a company issued bonds with a sinking fund, the company is less 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.

---

Definitions:

Serotonin

A neurotransmitter that regulates our experience of negative affect.

Aggressive Impulses

The sudden urges or drives to act or respond in a hostile or physically violent manner.

Testosterone

A steroid hormone found in both men and women but at higher levels in men, playing a key role in the development of male reproductive tissues and secondary sexual characteristics.

Hormone

A chemical substance produced in the body that regulates and controls the activity of certain cells or organs.