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1 FINANCE MCQS

From a bondholder’s point of view, bonds issued with a sinking fund provision are considered ____________?

  • Floating risk discount
  • Less risky
  • More risky
  • Floating risk premium
Correct Answer: B. Less risky

Detailed Explanation

Bonds with a sinking fund provision are considered less risky for bondholders because the issuer is obligated to retire a portion of the debt periodically, reducing default risk over time.

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