CFA Level I · CFA Level I Exam · Fixed-Income Markets for Corporate Issuers
Compared with a bond issued with a single maturity date, a serial bond structure is most accurately described as one in which:
A serial bond issue is divided into portions that mature on different dates, so principal is repaid in installments over time. It differs from callable bonds, which give the issuer a redemption right, and from convertible bonds, which allow exchange into equity.
- Athe issuer may call the bonds at par at any time
- Bthe bonds are exchanged for equity at the holder's option
- Cthe issue is divided into portions that mature on different datesCorrect
Explanation
A serial bond issue consists of separate maturities, with a portion of principal retiring on each scheduled date. The call option describes a callable bond and the equity exchange describes a convertible bond.
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