Brown now begins analyzing the FRN in Table 2. Specifically, she would like to price the FRN immediately following a coupon payment. Which of the following is the closest to Brown's answer? A. 100.00. B. 107.18. C. 97.56.
At a coupon reset date, the floating rate bond is always equal to its par value since the coupon yield is the same as the discount rate used to price the bond. So the two rates cancel each other.
