What characterizes serial bonds?

Serial bonds are characterized by having maturities that are spread over several years. This means that instead of all the bonds maturing at once, a portion of the bonds matures at regular intervals. This setup allows the issuer to manage debt repayment more effectively by making periodic payments instead of one large payment at maturity.

This structure is particularly beneficial for municipalities and government entities as it provides flexibility in managing cash flow and ensures that the issuer does not face a significant financial burden at one particular time. Additionally, investing in serial bonds can appeal to investors looking for regular income over time rather than waiting for a single lump-sum payment at maturity.

While the other options touch on characteristics of bonds in general, they do not accurately reflect the specific nature of serial bonds. For instance, bonds that mature on the same date describe term bonds, and those that are repaid through a lump sum payment refer to certain types of bonds that do not possess the staggered maturity feature characteristic of serial bonds.