CFA Practice Question

CFA Practice Question

As a portfolio manager, you are considering the purchase of floating-rate securities. The coupon rates for the bonds in question adjust annually and are based on a formula that is determined by the price of crude oil. These types of floating-rate securities are known as:
A. Inverse floaters
B. Dual index floaters
C. Non-interest rate index floaters
Explanation: Non-interest rate index floaters may be tied to a variety of indexes including inflation, commodity prices, or currency exchange rates. The key is that the adjustment formula is not linked to a reference interest rate.

User Contributed Comments 0

You need to log in first to add your comment.