Floating rate notes vs fixed coupon bonds

CFA Level I
#1

“The values of FRN are more stable than those of fixed rate debt of similar maturity because the coupon interest rates are reset periodically based on a reference rate”. Shouldnt it be LESS stable than those of fixed rate because of the continuous reset of FRN???

Thanks in advance

#2

Assume for a moment that the coupon rate is reset to the reference rate (i.e., not the reference rate plus a spread). When you compute the present value of the bond (using the reference rate as the discount rate), you get par. Thus, at every reset date, the value returns to par. So there’s very little fluctuation in the price (or value).

#3

You are awesome S2000!!! please please answer my other questions!!!

#4

You’re too kind.

I’ll noodle around and take a peek at some others.