What characterizes serial bonds?

Serial bonds are characterized by having multiple maturities over several years. This structure allows the issuer to retire a portion of the bond issue periodically, rather than repaying the entire principal amount at once on a single maturity date, as is the case with term bonds.

The staggered payment schedule provides cash flow benefits for both issuers and investors. For issuers, it can help manage debt levels and interest expense, while investors may appreciate the regular returns from principal repayments over time. This characteristic distinguishes serial bonds from other forms of debt instruments, such as term bonds, which mature all at once.

Given this, the option that focuses on the staggered nature of serial bonds aligns with their fundamental design, providing both flexibility and financial management advantages.