Floating-Rate Note - FRN

外汇网2021-06-19 20:55:03 53

A note with a variable interest rate. The adjustments to the interest rate are usually made every six months and are tied to a certain money-market index. Also known as a "floater".

|||These protect investors against a rise in interest rates (which have an inverse relationship with bond prices), but also carry lower yields than fixed notes of the same maturity. It's essentially the same concept as a adjustable-rate mortgage, except FRNs are investments (not debt).

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