Risks would floating-rate bond tend

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Reference no: EM131317283

A company has a fixed-rate semi-annual coupon bond outstanding. An increase in the market rate of interest will have which one of the following effects on this bond?

a) increase the coupon rate

b) decrease the coupon rate

c) increase the market price

d) decrease the market price

e) increase the time period

2. Which one of the following risks would a floating-rate bond tend to have less of compared to a fixed-rate coupon bond?

a) interest rate risk

b) default risk

c) liquidity risk

d) taxability risk

Reference no: EM131317283

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