Which Statement Regarding Sinking Funds Is True

question 66

Multiple Choice

Which statement regarding sinking funds is true?

• A)Sinking fund provisions sometimes 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, which 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.

---

Definitions:

Performance Analyzer

A tool or feature that assesses the performance of software or hardware, identifying bottlenecks and optimization opportunities.

Password

A string of characters used for user authentication to prove identity or access approval to gain access to a resource.

Analyze Performance

The process of examining and interpreting data or metrics to evaluate the effectiveness or efficiency of an action or system.

Current Database

Refers to the database that is currently being accessed or manipulated in a database management system.