What is meant by the spread duration for a floating-rate bond?
What will be an ideal response?
A floating-rate bond's price sensitivity will depend on whether the spread that the market wants changes. The spread is reflected in the quoted margin in the coupon reset formula. The quoted margin is fixed over the life of a typical floating-rate bond (or floater).
Spread duration is a measure used to estimate the sensitivity of a floater's price sensitivity to a change in the spread. A spread duration of 1.4 for a floater would mean that if the spread the market requires changes by 100 basis points, the floater's price will change by about 1.4%.
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Executives at Davidson Engineering want to let middle managers know that the company is going to be acquired by its largest competitor. Assuming any of the following are possible, how should executives communicate this?
A. Send a memo to all managers. B. Call a meeting of managers. C. Post a notice on all bulletin boards. D. Send an e-mail to all managers. E. Schedule a conference phone call.
Which of the following is not one of the four Standards of Ethical Conduct for Management Accountants?
A. Credibility B. Confidentiality C. Independence D. Integrity
Always includes an inside address
A) Letters B) Memos
Which of the following represents the major reason for developing the production plan as part of
Sales and Operations Planning? A) to plan for resources required to produce to the agreed plan B) to plan the acquisition of new manufacturing facilities C) to decide how to best produce exactly what is in the sales plan D) to plan a schedule for the production of individual products