The popularity of floating rate bonds is likely tied to protection against:
A) default risk.
B) marketability risk.
C) inflation risk.
D) systematic risk.

Question

Quizplus · Accepted Answer

Floating rate bonds offer protection against inflation risk because the interest payments adjust with market rates, which typically rise with inflation, preserving the bond's purchasing power.

The Popularity of Floating Rate Bonds Is Likely Tied to Protection