Floating-Rate Notes (FRN)

question 18

Multiple Choice

Floating-rate notes (FRN) :

• A) experience very volatile price changes between reset dates.
• B) are typically medium-term bonds with coupon payments indexed to some reference rate (e.g. LIBOR).
• C) do not appeal to investors with strong need to preserve the principal value of the investment should they need to liquidate prior to the maturity of the bonds.
• D) are typically long-term bonds with coupon payments indexed to some fixed rate.

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Definitions:

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Advancing Age

The process of becoming older, which can be associated with physical, cognitive, and social changes and challenges.

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