Q: Which of the following best defines a floating-rate bond?

• 1
  A bond with a fixed interest rate and has better yield than varying interest rate bond
• 2
  A bond with a fixed interest rate and has lower yield than varying interest rate bond
• 3
  A bond with a varying interest rate and has better yield than fixed interest rate bond
• 4
  A bond with a varying interest rate and has lower yield than fixed interest rate bond