[floh-ter] 
| 1. | a person or thing that floats. |
| 2. | Informal. a person who is continually changing his or her place of abode, employment, etc. |
| 3. | U.S. Politics. a voter not attached to any party, esp. a person whose vote may be purchased. |
| 4. | a person who fraudulently votes, usually for pay, in different places in the same election. |
| 5. | Animal Behavior. a territorial animal that has been unable to claim a territory and is forced into undefended, marginal areas with limited resources. |
| 6. | a speck or string that appears to be drifting across the eye just outside the line of vision, caused by cells or cell fragments in the vitreous humor registering on the retina; musca volitans. |
| 7. | Also called floating policy. Insurance. a policy that insures movable personal property. |
| 8. | Finance. any security or note that has a floating rate. |
| 9. | Medicine/Medical Slang. a corpse found floating in a body of water. |
| 10. | Australian. a meat pie served in a plate of gravy or pea soup. |
| float·er (flō'tər) n.
|
Floater
A bond or other type of debt whose coupon rate changes with market conditions (short-term interest rates). Also known as "floating-rate debt".
Investopedia Commentary
For example, a floater bond may have the coupon rate set at "T-bill rate plus 0.5%".
This type of instrument is more beneficial to the holder as interest rates are rising because it allows the holder to participate in the upward movement in rates. Conversely a floater is less advantageous to the holder when rates are decreasing because the rate at which they are receiving interest is declining.
Related Links
Advanced Bond Concepts
Bond Basics Tutorial
Forces Behind Interest Rates
Trying To Predict Interest Rates
See also: Bond, Coupon Rate, Fixed-Income Security, Inverse Floater, Treasury Bill
Also spelled: floaters, floatty, float
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