Quoted margin
The fixed spread added to the reference rate on a floating-rate note, set at issue and unchanged for its whole life.
Where you will meet it
Quoted margin appears in 2 learning outcomes on the CFA syllabus. A few of them:
- Set out coupon designs that do not pay a fixed rate
“A floating-rate note pays a reference rate plus a quoted margin, resetting periodically, so its price stays near par and its interest rate risk is confined to the short period until the next reset.”
- Tell a floating-rate note's quoted margin apart from its discount margin
“The quoted margin is the fixed spread added to the reference rate to set the coupon, and it is set at issuance.”
See also
Floating-rate note · Reference rate
Practise it
Practise quoted margin until it is automatic: questions that explain every wrong option.
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