Serial bonds can be issued in coupon or registered form.

Serial bonds can be issued in coupon or registered form.

• A. True
• B. False
• C. Only coupon
• D. Only registered

Answer: (B)

Serial bonds are issued with principal repaid in installments at different dates, which means tracking who owns each portion at any given time is essential for accurate interest and principal payments. Coupon form relies on bearer coupons to collect interest, which would require handling multiple sets of coupons for many maturities and investors and would make ownership transfers and payments much more complicated. Because of this, serial bonds are typically issued in registered (or book-entry) form so the issuer can identify the owner of each maturity and ensure the correct party receives payment. Coupon form is largely obsolete for new serial issues, so the statement is not correct.

Serial bonds are issued with principal repaid in installments at different dates, which means tracking who owns each portion at any given time is essential for accurate interest and principal payments. Coupon form relies on bearer coupons to collect interest, which would require handling multiple sets of coupons for many maturities and investors and would make ownership transfers and payments much more complicated. Because of this, serial bonds are typically issued in registered (or book-entry) form so the issuer can identify the owner of each maturity and ensure the correct party receives payment. Coupon form is largely obsolete for new serial issues, so the statement is not correct.