An Inverse Floater and a Super-Inverse Floater Are More Valuable

question 34

Multiple Choice

An inverse floater and a super-inverse floater are more valuable to a purchaser if:

• A) interest rates stay the same.
• B) interest rates fall.
• C) interest rates rise.
• D) held for a long time.
• E) None of these.

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Definitions:

Corporation

A form of business organization that is owned by owners, called shareholders, who have no inherent right to manage the business, and is managed by a board of directors that is elected by the shareholders.

Takings Clause

Part of the Fifth Amendment of the U.S. Constitution, stating that private property cannot be taken for public use without just compensation.

Eminent Domain

A governmental power whereby the government can take or condemn private property for a public purpose on the payment of just compensation.

Private Property

Land or possessions owned by individuals or corporations, not by the government or public as a whole.