The Purpose of a Bond Sinking Fund Is To

question 85

Multiple Choice

The purpose of a bond sinking fund is to:

• A)accumulate funds needed to pay the tax liability on the bond proceeds.
• B)accumulate funds to pay the regular interest payments.
• C)hold the bond proceeds until the funds need disbursed.
• D)repay bonds early either through purchases or calls.
• E)repay bondholders from a trust fund if the issuer defaults.

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Definitions:

Delivery

In legal and commercial contexts, delivery refers to the act of transferring possession or control of an item, asset, or document from one party to another.

Acceptance

The agreement to the terms of an offer, contract, or proposal, thereby creating a binding contract.

Intention

The state of mind or determination to perform a specific act or to act in a specific manner for a specific purpose.

Brown Bear

A large species of bear found in various parts of the world, known for its broad shoulders, humped back, and brown fur.