What extent do floating-rate bonds and puttable bonds

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Bond prices can fall either because of a change in the general level of interest rates or because of an increased risk of default or a change in the real rate of return (otherwise known as opportunity cost of capital). To what extent do floating-rate bonds and puttable bonds protect the investor against each of these risks?

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The paper is in relation to the risks associated with Bonds that are namely, the market risk (interest rate risk) and the loss of opportunity cost of capital. To hedge these losses, various options are used like the puttable bonds and the floating bonds that helps in reducing the effects of the variations of the market movements.

Reference no: EM131945364

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