In general a "floating rate" on a debt issue refers to:
I.Variable payment times for the interest payments
II.Variable interest payments
III.Yield on the debt equals the average dividend yield on the Toronto Stock Exchange
A)I and II
B)II
C)II and III
D)I and III

Question

Quizplus · Accepted Answer

A floating rate on a debt issue typically refers to variable interest payments, which is option II. Option I refers to variable payment times, which is not typically associated with a floating rate on a debt issue. Option III is not accurate, as the yield on the debt would not necessarily be tied to the average dividend yield on a stock exchange.

In General a "Floating Rate" on a Debt Issue Refers