Which of the Following Statements Is CORRECT

question 3

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 was issued.
• B) Most sinking funds require the issuer to provide funds to a trustee,who holds 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 increase after a company has issued bonds with a sinking fund,the company will be less likely to buy bonds on the open market to meet its sinking fund obligation and more likely to call them in at the sinking fund call price.

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Definitions:

Ambivalent Attachment

A type of insecure attachment where an individual simultaneously desires closeness with their caregiver but also resists it out of fear of rejection.

Percent

A measure expressed as a fraction of 100, representing a part of a total.

Avoidant Attachment

A type of attachment style characterized by difficulty in trusting others, emotional distance, and reluctance to depend on others for emotional support.

Anxious Attachment

A type of attachment characterized by insecurity and worry about relationships, often stemming from inconsistent caregiving experiences in childhood.