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Although bond principal is technically not repaid until maturity, sinking funds reduce bondholder risk by requiring the borrower to make periodic payments to a bank
Although bond principal is technically not repaid until maturity, sinking funds reduce bondholder risk by requiring the borrower to make periodic payments to a bank for principal retirement. The same can be accomplished by:
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randomly calling in bonds for earlier retirement | ||
issuing serial bonds which spread the principal repayment over a number of years | ||
either of the above | ||
none of the above |
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