VARIABLE RATE PRODUCTS

---

SUMMARY

This module enables participants to examine the funding instruments associated with variable rates including floating rate notes and bonds with interest rate options. The focus of the analysis is on costs and breakevens.

---

OBJECTIVES

Upon completion of this module, participants will be able to:

1. Identify investor and issuer advantages of floating rate notes.

2. Identify the pricing conventions of floating rate notes.

3. Calculate yields of floating rate notes including current yield and simple margin.

4. List types of floating rate notes and compare their advantages.

5. Discuss issuer and investor interest rate expectations relative to put features on fixed coupon bonds.

6. Calculate the breakeven refinancing rate for a puttable bond.

7. Discuss issuer and investor views of interest rates for callable bonds.

8. Calculate the crossover yield for a callable bond.

Back to modules list

Back to home page