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Which of these are structured to have a portion of the principal to mature before the entire balance has been repaid?
Serial bonds
Sinking fund provisions
Both A and B
Neither A nor B
The correct answer is: Both A and B
Both A and B are structured to have a portion of the principal to mature before the entire balance has been repaid. Serial bonds are bonds that are issued in a series, with each bond having a different maturity date. This means that a portion of the principal is repaid at each maturity date, rather than waiting for the entire balance to be repaid at the end. Sinking fund provisions also allow for a portion of the principal to be repaid before the entire balance is due. This provision requires the issuer to set aside funds over time to repay the bond's principal before the maturity date.