Hi all, I need help understanding the answer for this question In Schweser Bk6 Sample 3 - Morning. 102) Which statement regarding sinking funds is least likely correct? Answer - D) If rates have declined since the bond was issued, companies are likely to choose to retire a proportion of the debt through the delivery of securities. If rates declined, isnt it cheaper for companies to retire their debt? Why is this answer incorrect? Thanks.
that was a weird question, but the above scenario is describing a “call” feature, not a sinking fund. Sinking funds have scheduled principal repayments.