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The Purpose of a Sinking Fund Is To

Question 226

Multiple Choice

The purpose of a sinking fund is to:


A) Distribute the proceeds received from a bond issue over a period of time.
B) Gather funds so that sufficient money is available when the bond issue matures to pay off the debt.
C) Distribute the interest payments to the individual bondholders.
D) Retire part or all of a bond issue prior to maturity.
E) Retain the interest that accrues on zero-coupon bonds.

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