medium · Debt Capital Markets bond-instruments-structures
If a 10-year SOFR-based floating rate note (FRN) is trading at a discount margin (DM) that is higher than its quoted spread, which of the following must be true about the bond's price?
- The benchmark SOFR curve is inverted.
- The bond is trading at a premium to par.
- The bond is trading at a discount to par.
- The bond is trading exactly at par.
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