Floating-Rate Debt Is Advantageous to Investors Because the Interest Rate

question 15

True/False

Floating-rate debt is advantageous to investors because the interest rate moves up if market rates rise.Since floating-rate debt shifts interest rate risk to companies, it offers no advantages to issuers.

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Definitions:

Empirical Formula

The simplest positive integer ratio of atoms present in a compound, not providing structural information but indicating the proportion of elements.

Molecular Formula

A molecular formula represents the number and type of atoms in a molecule, indicating the composition of the molecule without showing its structure.

Elemental Analysis

A method for determining the composition of a substance in terms of its constituent elements.

Transformations

The application of mathematical functions to data to change its scale or distribution, often to meet the assumptions of statistical tests.