The value of a floating-rate bond is par on each interest payment date.

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A floating-rate bond's interest payments are tied to a benchmark rate, such as LIBOR. This means that the interest payments fluctuate based on changes in the benchmark rate, which can cause the value of the bond to fluctuate as well. However, on each interest payment date, the bond will make a payment equal to the floating rate multiplied by the face value of the bond (typically $1,000). This payment will allow the bond to maintain its par value on each payment date.

The Value of a Floating-Rate Bond Is Par on Each