Floating rate bonds have adjustable rates to protect real rates of return against inﬂation.The rates paid are limited by:

Question

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Floating rate bonds have adjustable rates that protect real rates of return against inflation. The rates paid are limited by a floor rate, which sets the minimum, and a ceiling rate, which sets the maximum. There are no put provisions of the issues that impact the rates paid on floating rate bonds. Therefore, the correct answer is E) Both B and C.

Floating Rate Bonds Have Adjustable Rates to Protect Real Rates