Income rather than price is the primary driver of FRN returns. As policy rates and SOFR move, FRN coupons adjust accordingly, allowing income to rise in higher-rate environments and decline when rates ...
Dr. JeFreda R. Brown is a financial consultant, Certified Financial Education Instructor, and researcher who has assisted thousands of clients over a more than two-decade career. She is the CEO of ...
Returns in floating rate notes are driven by two main components: short-term interest rates and credit spreads. What Drives Returns in Floating Rate Notes? Corporate floating rate notes (FRNs) are ...