Floating-Rate Bonds Are Designed to ___________ While Convertible Bonds Are

question 86

Multiple Choice

Floating-rate bonds are designed to ___________ while convertible bonds are designed to __________.

• A)minimize the holders' interest rate risk; give the investor the ability to share in the price appreciation of the company's stock
• B)maximize the holders' interest rate risk; give the investor the ability to share in the price appreciation of the company's stock
• C)minimize the holders' interest rate risk; give the investor the ability to benefit from interest rate changes
• D)maximize the holders' interest rate risk; give investor the ability to share in the profits of the issuing company
• E)None of the options

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Definitions:

Bond Funds

Investment funds that pool money from various investors to purchase a diversified portfolio of bonds, providing income and diversification.

Net Asset Value

The total value of a fund's assets minus its liabilities, often used to determine the value of shares in a mutual fund or ETF.

Year-End Assets

The total value of all assets that a company or individual owns at the end of a fiscal year.

Liabilities

Financial obligations or debts owed by a person or business to others, required to be repaid over time.