A floating-rate bond by definition has a:

A) Principal amount that varies with the inflation rate.
B) Principal amount that varies with the time to maturity.
C) Coupon payment that varies with an interest rate index.
D) Coupon payment that varies with the time to maturity.
E) Coupon payment that varies with the amount of debt outstanding.

Floating-Rate Bond

A bond whose interest payments fluctuate with the market interest rates, rather than being fixed.

Coupon Payment

The annual interest payment made to bondholders, typically expressed as a percentage of the face value.

Interest Rate Index

A benchmark interest rate that serves as a reference point for determining interest rates on various financial instruments or loans.