Which of the Following Is NOT a Feature of Euro

question 43

Multiple Choice

Which of the following is NOT a feature of euro floating rate notes (FRNs) ?

• A) The coupon rates are usually reset every 6 months.
• B) FRNs are bearer securities.
• C) Many have a call option that gives the investor the right to sell the bond back to the issuer prior to maturity.
• D) An FRN issue is usually about USD 100 million.

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Definitions:

Market Risk

Market risk is the potential for investors to experience losses due to factors that affect the overall performance of the financial markets, such as economic recessions or interest rate changes.

Inflation

The pace at which the average cost of products and services escalates, causing the value of money to diminish.

Interest Rates

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage rate.

Beta

A measure of the volatility, or systematic risk, of a security or portfolio compared to the market as a whole.