Question: An important difference between a floating-rate note and a fixed-rate note indexed to Libor is that A. The price of the floating-rate note resets to
An important difference between a floating-rate note and a fixed-rate note indexed to Libor is that A. The price of the floating-rate note resets to par on each coupon/reset rate, whereas that of the fixed-rate note does not necessarily do so. B. A fixed-rate note is always worth par at issue whereas the floating-rate note may not be. C. The price of the fixed-rate note is deterministic and known because the bond pays fixed coupons
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
