Multiple Choice QuestionA sequence of small bond issues of progressively longer maturities are called _____ bonds.Multiple choice question.couponserialfloating-ratecallable

The correct answer is: serial bonds.

Serial bonds are a group of bonds that mature in installments at regular intervals until the entire principal is repaid. The issuer will repay a portion of the bonds each year until all of the bonds are repaid. This is different from a term bond issue, in which all of the bonds mature at once.

Here's a step-by-step breakdown:

1. Understand the question: The question is asking for the term that describes a sequence of small bond issues of progressively longer maturities.

2. Review each option:

   • Coupon bonds: These are bonds that pay interest at regular intervals, and return the principal on the maturity date. This doesn't fit the description in the question.
   • Serial bonds: These are bonds that mature at different times, with a portion of the total amount maturing periodically until all are mature. This fits the description in the question.
   • Floating-rate bonds: These are bonds with interest rates that adjust periodically based on a benchmark rate. This doesn't fit the description in the question.
   • Callable bonds: These are bonds that the issuer can choose to redeem before they mature. This doesn't fit the description in the question.

3. Choose the correct answer: Based on the definitions of each type of bond, the correct answer is serial bonds.