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

question 33

True/False

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

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Definitions:

Efficiency

Efficiency refers to the ability to accomplish a job with a minimum expenditure of time and resources. It is often used to describe the effectiveness of a process, system, or machine.

Effectiveness

The degree to which objectives are achieved and targeted problems are solved, in contrast to efficiency, which focuses on the resources required to achieve these objectives.

BPR

A strategy aimed at enhancing the efficiency and effectiveness of an organization's workflows, known as Business Process Reengineering.

BPI

Business Process Improvement, a strategic approach to identify, analyze, and improve existing business processes to meet new goals or standards of quality.