Sometimes a floater may have a cap and a floor, which allows an investor to know the maximum and minimum interest rates paid by the note.In Europe, most FRNs are liquid, as the biggest investors are banks.Investing, bonds / Fixed Income, what Is a Floating-Rate Note?
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United States, government sponsored enterprises (GSEs) such as the, federal Home Loan Banks, the, federal National Mortgage Association (Fannie Mae) and the.In other words, the yield on a bond with a 10-year maturity should pay, under normal market conditions, a higher yield than a bond with a two-month maturity.Trading edit Securities dealers make markets in FRNs.

The interest rate for a floating rate note is tied to a short-term benchmark rate.FRN is tied to a benchmark rate such as.S.