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

question 32

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 above

---

Definitions:

Escrow Company

A neutral third-party entity that holds assets, including money, property, and documents, on behalf of other parties during the completion of a transaction.

Financing Statement

A document filed to give public notice of a secured transaction, indicating an interest in the assets of a debtor.

Collateral

Collateral offered to secure a loan, subject to seizure upon default.

Collection Agency

An organization employed by creditors to collect funds that are owed by individuals or businesses, usually when those debts are past due.