CFA Practice Question

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CFA Practice Question

If a firm has variable-rate debt and the interest rate rises, the market value of the firm's debt should ______.

A. increase
B. decrease
C. remain unchanged
Correct Answer: C

If a bond has a variable interest rate, the rate will change with the market rate, and its market value will stay the same.

User Contributed Comments 2

User Comment
To-be-CFA This one got me. :P
JLWM Same!
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