A corporation is more prone to issue floating-rate bonds when they expect future interest rates to _____ over the life of the bond.

A) Remain constant.
B) Increase briefly and then decline slightly.
C) Continually decline.
D) Decline briefly and then increase significantly.
E) Continually increase.

Floating-Rate Bonds

Bonds with variable interest rates that adjust periodically based on a benchmark or index rate.

Future Interest Rates

Future interest rates refer to the anticipated rates at which borrowers will be charged for loans or the return investors will earn on deposits, based on predictions.

Increase

A rise in the quantity or value of something, such as profits, revenue, weight, etc.