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Floating Rate Note (FRN)
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Floating Rate Note (FRN)
A fixed
principal
instrument, often utilized as the
basis
for a
swap
, which has a
long
or even indefinite life and whose
yield
is reset periodically relative to a
reference index rate
to reflect changes in short- or intermediate-term
interest
rates. Also called Adjustable Rate Instrument, Adjustable Rate Note. See also Reverse Floating Rate Note (diagram),
Participating Capped Floating Rate Note
,
Leveraged Reverse Floating Rate Note
.
Glossary
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