Question
Which of the following risk(s) is/are Floating-rate
bonds designed to minimise?Solution
Floating Rate Bonds (FRBs) are bonds that have a variable coupon, equal to a money market reference rate (like MIBOR or LIBOR) plus a quoted spread (i.e., quoted margin). · Floating rate bonds allow the investor to earn a rate of interest income tied to current interest rates. As such, FRBs carry little interest rate risk. · Its price shows very low sensitivity to changes in market interest rates. When market rates rise, the expected coupons of the FRB increase in line with the increase in forward rates, which means its price remains constant. Thus, FRBs differ from fixed rate bonds, whose prices decline when market rates rise. · As FRBs are very less sensitive to interest rate risk, they are considered conservative investments for investors who believe market rates will increase.
Reserve Bank of India was set up based on the recommendations of which commission?v
During the ______ foreign exchange crisis, Indians transferred the gold reserve to the Bank of England to secure about 405 million loans.
Titan Company Limited will buy an additional 27.1 percent stake in CaratLane, for a total consideration of ________.
Consider the following statement regarding co-operative credit societies:
1. The first known mutual aid society in India was probably the ‘Anyo...
Who was the first president of Asian Development Bank (ADB)?
National Cooperative Exports Limited (NCEL) was set up in which of the following year?
Online game streaming and esports content platform, Rooter, has integrated with the _______ to stream curated, high-quality gaming and esports content.
Which of the following is a financial derivative that allows an investor to swap or offset their credit risk with that of another investor?
Which act empowered the RBI to issue 'Asset Reconstruction Companies (ARCs)' licenses in India?
What is the primary function of the World Bank?
