Bond prices can fall either because of a change in the general level of interest rates...

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Finance

Bond prices can fall either because of a change in the generallevel of interest rates or because of an increased risk of defaultor a change in the real rate of return (otherwise known asopportunity cost of capital). To what extent do floating-rate bondsand puttable bonds protect the investor against each of theserisks?
Be sure to support your statements with logic and argument

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Price of bonds is inversely proportional to the prevailing market rate ie the opportunity cost of capital When market rate rises bond prices fall and vice versa Unlike a fixed coupon bond where coupon rate is fixed till maturity coupon rate for a floating rate bond adjusts periodically based on the prevailing federal rates with some spread rate added to See Answer

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Bond prices can fall either because of a change in the generallevel of interest rates or because of an increased risk of defaultor a change in the real rate of return (otherwise known asopportunity cost of capital). To what extent do floating-rate bondsand puttable bonds protect the investor against each of theserisks?Be sure to support your statements with logic and argument