The desire for floating-rate bonds, and consequently their increased usage, arose out of the experience of the early 1980s, when inflation pushed interest rates up to very high levels and thus caused sharp declines in the prices of outstanding bonds.

Question

Quizplus · Accepted Answer

The statement correctly reflects the historical context that led to the increased usage of floating-rate bonds in response to high inflation and interest rates in the early 1980s.

The Desire for Floating-Rate Bonds, and Consequently Their Increased Usage