Asked by Aparna Narayanan on Jul 04, 2024
Verified
Which of the following statements is true of floating-rate bonds?
A) They are also called serial bonds.
B) They offer interest payments much above the prevailing rates.
C) They do not have fixed interest payments.
D) They have progressively longer maturity.
E) They are often associated with startup firms with limited track records.
Serial Bonds
Bonds that mature at different dates, allowing the issuer to spread out the repayment over time.
- Understand the framework and usefulness of bonds, along with their redemption and risk features.
Verified Answer
JM
Joycelyn McCulloughJul 05, 2024
Final Answer :
C
Explanation :
Floating-rate bonds have interest payments that adjust periodically based on a reference interest rate or index, meaning their interest payments are not fixed.
Learning Objectives
- Understand the framework and usefulness of bonds, along with their redemption and risk features.