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Chapter 18 highlights the fact that up until this point, we have discussed a number of different theories of delinquency. Pick your "favorite" theory that we have discussed so far and describe this theory to the best of your ability. What are the main assumptions of the theory? What are the strengths and weaknesses of the theory?
Floating Rate Bond
A floating rate bond is a bond with a variable interest rate, which adjusts periodically according to a specified benchmark.
Variable Rate
An interest rate that can change over the period of a loan or mortgage, based on an underlying benchmark interest rate or index.
Coupon Payment
The interest payment made to bondholders, typically semiannually, as a return on investment.
Coupon Bond
A bond that makes regular interest payments to its holders, named after the detachable coupons once used for interest payments.
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