Sinking Fund
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Description
An account managed by the bond trustee for early bond redemption.
It is cash set aside by a corporation at regular intervals (usually with a trustee) for the purpose of repaying a bond issue at its maturity date.
Concept Prerequisite
Wikipedia Reference
http://en.wikipedia.org/wiki/Sinking fund
Learning Material
Covered in Topic(s)
| Interest Rates and Bond Valuation |
| Liabilities |