Floater
Contents
Deciphering Floaters: A Deep Dive into Variable-Rate Debt Instruments
Embark on a journey to unravel the intricacies of floaters, also known as floating rate notes (FRNs), and understand their role in the realm of fixed income securities. Explore the nuances, benefits, and special considerations associated with these variable-rate instruments.
Understanding Floaters: Navigating Variable Interest Payments
Delve into the world of floaters, where interest rates fluctuate based on predetermined benchmark indices like LIBOR. Learn how floaters protect investors from interest rate fluctuations and how they differ from fixed-rate notes.
Special Considerations: Exploring Caps, Floors, and Reset Periods
Explore the protective mechanisms embedded in most floaters, including caps and floors, which limit the maximum and minimum interest rates. Understand the significance of reset periods and how they affect the adjustment frequency of interest rates.