Describe how an inverse floater works to the advantage of an investor who receives coupon payments of

Question:

Describe how an inverse floater works to the advantage of an investor who receives payments of 10 percent minus LIBOR if LIBOR is currently at 4 percent. When is it a disadvantage to the investor? Does the issuing party bear any risk?
Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...