Your neighbour is bragging that the coupon payment on the bonds he bought five years ago has increased in each of the last three years. You know he must own _______________.

Question

Quizplus · Accepted Answer

A floating rate bond has a variable interest rate, which means the coupon payment can change over time, typically in response to changes in benchmark interest rates. This is why the coupon payment on the bonds the neighbour bought could have increased in each of the last three years.

Your Neighbour Is Bragging That the Coupon Payment on the Bonds