A Floating-Rate Bond by Definition Has A

question 216

Multiple Choice

A floating-rate bond by definition has a:

• A) Principal amount that varies with the inflation rate.
• B) Principal amount that varies with the time to maturity.
• C) Coupon payment that varies with an interest rate index.
• D) Coupon payment that varies with the time to maturity.
• E) Coupon payment that varies with the amount of debt outstanding.

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Definitions:

Rent

A periodic payment made by a lessee to a lessor for the use of land, buildings, or other property.

Supply

The total amount of a specific good or service that is available to consumers at current prices.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of the good that suppliers are willing to sell.

Inelastic

Describing a situation in which the demand or supply of a good or service is relatively unresponsive to changes in price.