Floating Rate Bonds Provide Which One of the Following Advantages

question 57

Multiple Choice

Floating rate bonds provide which one of the following advantages?

• A) A lower risk for the issuing corporation
• B) A higher initial rate received by the investor
• C) Higher tax advantages for the investor than a conventional bond
• D) A fixed market value for the investor

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Definitions:

Statistical Arbitrage

A quantitative strategy that seeks to take advantage of price inefficiencies between related financial instruments by employing complex mathematical models.

Triangular Arbitrage

Triangular arbitrage is a risk-free trading strategy that takes advantage of a discrepancy between three foreign currencies in the foreign exchange market.

Carry

The profit or loss that arises from holding an investment over a period of time, considering both the cost of holding the investment and any returns it generates.

AUM

Stands for Assets Under Management, referring to the total market value of the investments that a person or entity manages on behalf of clients.