|Consider the following statements about Sinking Fund|
|1. It is a method of repayment of public debt.|
|2. It is created by the government out of budgetary revenues every year.|
|Which of the statements given above is/are correct?|
A) Only 1
B) Only 2
C) Both 1 and 2
D) None of these
Correct Answer: A
Solution :[a] A sinking fund is a fund established by an economic entity by setting aside revenue over a period of time to fund a future capital expense, or repayment of a long-term debt.
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