Which one of these applies to floating-rate bonds?
A)Bondholders can generally redeem their bonds at par at any time.
B)Coupon payments are variable while the par value is fixed.
C)Interest adjustments are accrued and paid on the maturity date.
D)Coupon payments are fixed but the par value is variable.
E)Bondholders frequently are granted a put provision at the current market price.

Question

Quizplus · Accepted Answer

Floating-rate bonds have variable coupon payments that are tied to a benchmark interest rate, while the par value remains fixed. Bondholders cannot generally redeem their bonds at par at any time, and interest adjustments are typically made periodically, rather than just on the maturity date. Put provisions at the current market price are not typically granted to holders of floating-rate bonds.

Which One of These Applies to Floating-Rate Bonds