The floating interest rate on 'Specific Coupon Rate Debentures' is usually tagged with the ............ rate.
Answer & explanation
Correct answer: option 2
The correct answer is option 2- Bank rate.
Specific Coupon Rate Debentures: These debentures are issued with a predetermined interest rate, known as the coupon rate. This rate can be fixed or floating, with floating rates often tied to the bank rate.