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

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Definitions:

Risky Shift

A tendency for groups to take greater risks than the same individuals (on average) would have decided to take individually.

Group Polarization

The tendency of a group to make decisions that are more extreme than the initial inclination of its members, following group discussions.

Directive Leader

A leader who provides clear instructions, sets standards and guidelines, and expects subordinates to follow orders and procedures closely.

Directive Leader

A leader who provides clear expectations and specific directions to their followers.