Which One of the Following Risks Would a Floating-Rate Bond

question 24

Multiple Choice

Which one of the following risks would a floating-rate bond tend to have less of as compared to a fixed-rate coupon bond?

• A) Real rate risk
• B) Interest rate risk
• C) Default risk
• D) Liquidity risk
• E) Taxability risk

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Definitions:

Density

A measure of mass per unit of volume; the amount of matter contained within a given volume.

Volume

The capacity of space an entity or material possesses.

Mass

A physical property indicating the amount of matter in an object, typically measured in kilograms or grams.

Density

A characteristic indicating the amount of mass contained in a given volume of a material.