Which One of the Following Risks Would a Floating-Rate Bond

question 78

Multiple Choice

Which one of the following risks would a floating-rate bond tend to have less of as compared to a fixed-rate coupon bond?

• A)real rate risk
• B)interest rate risk
• C)default risk
• D)liquidity risk
• E)taxability risk

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Definitions:

Variable Manufacturing Overhead

Variable manufacturing overhead includes all manufacturing costs that vary with the level of production, such as utilities or materials needed in the production process.

Standard Hours Allowed

The time allocated for a task based on predetermined standards.

Actual Direct Labour Hours

The real number of labor hours worked by employees directly involved in the production process, typically recorded after the work has been completed.