A medium-term bond with a coupon rate that changes with market conditions is a(n) ________ note.

Question

Quizplus · Accepted Answer

A medium-term bond with a coupon rate that changes with market conditions is typically referred to as a variable rate note. This means that the interest rate on the bond will fluctuate based on changes in the market, such as changes in the benchmark interest rate. This can be beneficial to investors when interest rates are rising, as the coupon rate on the bond will increase as well, leading to higher returns.

A Medium-Term Bond with a Coupon Rate That Changes with Market