CFA Practice Question

There are 490 practice questions for this study session.

CFA Practice Question

A floater resets its interest rate quarterly at three-month LIBOR plus 0.5%. It is being sold at a discount to par value. Its quoted margin is most likely ______ 0.5%.
A. higher than
B. equal to
C. lower than
Explanation: The quoted margin is always 0.5%.

User Contributed Comments 2

User Comment
sahilb7 Huh?!?!?!
ascruggs92 tricky. because it resets quarterly, in the time between resets, the bond can trade at a premium/discount to par if interest rates fluctuate. However, the quoted margin never changes
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