The Purpose of a Floating-Rate Bond Is To

question 32

Multiple Choice

The purpose of a floating-rate bond is to:

• A)Save interest expense for corporate issuers
• B)Avoid making interest payments until maturity
• C)Shift the yield curve
• D)Offer rates adjusted to current market conditions

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Definitions:

Legal Problems

Issues or disputes that require resolution through the legal system or through legal processes.

Private Law

The branch of law that deals with relationships between individuals or institutions, as opposed to public law which concerns itself with the state and individuals.

Damages

Financial compensation ordered to be paid as a remedy for harm caused by a breach of duty or negligence.

Civil Law

A legal system based on written codes and statutes, as opposed to common law, which is based on judicial precedents and interpretations.