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

question 78

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:

Price

The amount of money expected, required, or given in payment for something, reflecting the value that customers pay for goods or services.

Substitutes

Products or services that can replace each other in use, offering consumers choices in the marketplace.

Demand Curve

A graphical representation showing the relationship between the quantity of a good consumers are willing and able to purchase and its price.

Income

Money that an individual or business receives in exchange for providing a good or service or through investing capital.