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a. Short-term investors such as money market mutual funds invest in floating-rate securities having maturities greater than 1 year. Suppose that the coupon rate is

a. Short-term investors such as money market mutual funds invest in floating-rate securities having maturities greater than 1 year. Suppose that the coupon rate is reset everyday. Why is the interest rate risk small for such issues? b. Why would it be improper to say that a floating-rate security whose coupon rate resets every day has no interest rate risk?

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