Floating-rate bond is a bond wherein the coupon interest rate is 4.375% for the first six months and changes to a rate equal to the 10-year Treasury bond rate plus 1.3%.
A floating Rate Bond is a type of bond wherein the rate of interest can fluctuate or change at regular intervals based on the benchmark rate set. In other words, the interest rates may vary throughout the tenure of the bond.
A bond may be defined as a kind of loan/debt security that has a fixed income investment that is made by an investor to a borrower who is usually big corporate houses, government sector, or private banks. The amount that is to be repaid at the maturity period of a bond as well as its interest depends upon the kind of bond issued for a specific period.
Main five types of Bonds are:
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