Floating-rate debt is the most common method for lenders to protect themselves from losses that arise as a result of
A)increases in the market interest rate.
B)decreases in the market interest rate.
C)increases in the stated interest rate on bonds.
D)decreases in the stated rate on bonds.

Question

Quizplus · Accepted Answer

Floating-rate debt adjusts the interest rate based on changes in the market interest rate, thus protecting lenders from losses when market rates rise.

Floating-Rate Debt Is the Most Common Method for Lenders to Protect