Which statement best describes the alternative redemption option allowed by a certificate-holding municipality?

• A. Redemption in installments
• B. Redemption in full only
• C. Redemption by sale
• D. None

Answer: (A)

The key idea is that some certificates issued by a municipality include the ability for the issuer to retire part of the issue over time, rather than paying everything back at once. This is called redemption in installments. It gives the municipality flexibility to match debt retirement with cash flow from the project or taxes, spreading out the debt service rather than closing it all out in a single lump sum. For investors, this means principal can be returned in separate payments on set dates, which also introduces reinvestment considerations. The other options imply less flexible or non-standard ways to unwind the debt (a full lump-sum redemption, or selling the certificate on the market), which do not describe the issuer’s alternative installment redemption capability.