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Question (Relevant to the Series 7, Series 51, Series 52, Series 53, Series 62, Series 82, and Series 99):
When money is regularly put into an escrow account in order to redeem the bonds before maturity this is called:
Answers:
A. A sinking fund redemption
B. Advance refunding
C. Defeasement
D. A make whole provision
Correct Answer: A. A sinking fund redemption
Rationale: A sinking fund redemption requires the issuer to set money aside regularly in a reserve account for the redemption of the bonds before maturity.
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