With respect to floating-rate bonds, a reference rate such as the London Interbank Offered Rate (LIBOR) is most likely used to determine the bonds:

Group of answer choices

[A] spread

[B] coupon rate

[C] frequency of coupon payments

[D] time to maturity

If the value of a Treasury bond was lower than the value of the sum of its parts (STRIPPED cash flows), then:

Group of answer choices

[A] arbitrage would probably occur.

[B] arbitrage would probably not occur.

[C] the FED would adjust interest rates.

[D] None of the above.

Investors who believe that interest rates will rise most likely prefer to invest in:

Group of answer choices

[A] inverse floaters

[B] fixed-rate bonds

[C] floating-rate notes

[D] zero-coupon bonds

You recently bought $2 million of 3s US Treasury notes, expiring in 10 years, and paying semiannual coupons. How much do you expect each coupon payment to be?

Group of answer choices

[A] $65,000

[B] $16,250

[C] $32,500

[D] $20,000

[E] None of the above