- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 2. Fixed-Income Cash Flows and Types
- Subject 1. Fixed-Income Cash Flow Structures
CFA Practice Question
Floating-rate bonds have adjustable rates to protect real rates of return against inflation. The rates paid are limited by ______.
II. a floor rate that sets the minimum
III. a cap rate that sets the maximum
I. the put provisions of the issues
II. a floor rate that sets the minimum
III. a cap rate that sets the maximum
Correct Answer: II and III
User Contributed Comments 2
| User | Comment |
|---|---|
| RCapistrano | Protect both bond issuers(III) and holders(II). |
| 2014 | If modified question Protection only to bondholders: floor rate Protection only to issuers: Cap rate |