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    Question

    A 'Floating Rate Bond' is one

    where:┬а
    A The bond price floats in the stock market. Correct Answer Incorrect Answer
    B The coupon rate is adjusted periodically based on a benchmark rate (like Repo or T-Bill rate). Correct Answer Incorrect Answer
    C The maturity date keeps changing. Correct Answer Incorrect Answer
    D The bond is issued by a shipping company. Correct Answer Incorrect Answer
    E The bond has no face value. Correct Answer Incorrect Answer

    Solution

    Unlike fixed-rate bonds, the interest on floating-rate bonds changes in line with market interest rates.

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