Floating-rate bonds have a___ that is adjusted with current market interest rates. coupon rate dividend yield maturity date coupon payment date face value

Floating-rate bonds have a coupon rate that is adjusted with current market interest rates, allowing investors to receive interest payments that fluctuate based on prevailing rates. This makes them an attractive option during periods of rising interest rates, as the returns can increase over time, keeping pace with market conditions. A common misconception is that floating-rate bonds are risk-free; however, their value can still be affected by credit risk and fluctuations in interest rates. Investors should also pay attention to the reference rate used for adjustments, as differences can lead to variability in expected returns. Due diligence is key!