Even Though Many Bonds Have Deferred Sinking Funds, the Sinking

Multiple Choice

Even though many bonds have deferred sinking funds, the sinking fund has the following effects on bondholders:
I.provides extra protection to bondholders as both an early warning system and perhaps some collateral cash;
II.provides an option to the firm to buy bonds at the lower of market or face value;
III.puts the bondholders at added risk due to potential inability to meet sinking fund payments

A) I and II only
B) III only
C) II only
D) II and III only