Floating Rate Bonds Have Adjustable Rates to Protect Real Rates

question 43

Multiple Choice

Floating rate bonds have adjustable rates to protect real rates of return against inflation.The rates paid are limited by:

• A)the put provisions of the issues.
• B)a floor rate which sets the minimum.
• C)a ceiling rate which sets the maximum.
• D)Both A and B.
• E)Both B and C.

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Definitions:

Developed Countries

Nations with a high level of economic development, typically characterized by a high gross domestic product (GDP) per capita.

Leveled Off

A state where a variable, after a period of growth or decline, stabilizes and shows no significant change.

Biodiesel

A renewable, clean-burning diesel substitute produced from a variety of biomass sources, such as vegetable oils and animal fats.

Economically Viable

The ability of a project or business to generate a profit or sufficient benefits to cover its expenses and provide a return on investment.