Which term describes the provisions for repaying the bond debt?

Prepare for the GFOA Certified Public Finance Officer Exam with focused study materials and detailed multiple-choice questions. Maximize your learning opportunities and enhance your understanding of capital and operating budgeting.

The term that describes the provisions for repaying the bond debt is "redemption provisions." These provisions outline the specific terms under which the bond can be repaid or redeemed before its maturity date, including any specified dates, amounts, and conditions for early repayment. Redemption provisions ensure clarity and establish the legal framework for how and when the principal amount of the bond will be returned to the bondholders, which is essential for maintaining investor confidence and pricing of the bonds.

Other options such as debt coverage ratio, financial covenants, and cash flow analysis serve different purposes in the context of bonds and financial management. The debt coverage ratio assesses the ability of the issuer to cover debt obligations, financial covenants are conditions set in a bond agreement that the issuer must adhere to, and cash flow analysis evaluates the inflows and outflows of cash over a period, but none of these directly describe the specific provisions related to the repayment of bond debt.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy