What characterizes a serial bond?

A serial bond is characterized by maturing in installments rather than having a single maturity date. This means that the issuing entity pays back portions of the principal amount of the bond at various scheduled intervals over the life of the bond. This structure allows for more manageable payments and can accommodate the issuer's cash flow needs.

The rationale behind using serial bonds is to reduce refinancing risk and to align with expected revenue streams. For investors, this can provide some degree of liquidity, as portions of their investment are returned to them at different times, rather than waiting until a single maturity date.

The other options highlight different types of bonds or features that do not apply to serial bonds. Bonds that mature fully on one date represent traditional bonds with a single maturity. Secured bonds relate to collateral backing the bond, and convertible bonds offer investors the option to convert the bond into equity, both of which are distinct from the concept of serial bonds.