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8/8/2026 4:50


Coupon on a non-callable Inverse Floater is determined according to the following formula
C = Max(0 , 10% - Libor) where C represents Coupon payable semi-annually.
Compared to the price of a vanilla coupon bond, how does the price of this inverse floater change?

a : Decreases greater than a regular coupon bond, as interest rates rise
b : Remains constant regardless of interest rate changes
c : Decreases less than a regular coupon bond, as interest rates rise
d : None of the above

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