Bonds issuer is obligated to pay off bonds systematically over time using a sinking fund. a. What are the two ways sinking funds can be handled? b. How do bond issuers choose between these two ways? Explain.

a) Open market and redemption at set price.

b)Bonds purchased on open market or called for redemption at set price.The bonds is called on the open market,the interest rates inscrese caused by the bonds are sell at discount on open market.The interest rates is decrease bonds are sell at premium on the open market. So that it will be probably redeemed from bondholders directly.