Floating rate note_Sep 2010, question2

Is there any part of the course that speaks about Floating rate notes? I got the derivation wrong because I didn't know what a FRN was, I assumed it was something else.

However the examiner did not explain that a FRN is just a bond paying coupons = floating rate (e.g LIBOR) + fixed rate, it's like someone telling you to price a bond with a sticky coupon. Anyway I presume that probably there is somewhere in the notes where this is explained but I couldn't get anything?

 

Floating rate notes are the same as floating rate bonds, which Hull mentions in Section 7.7 in relation to swaps.

These are bonds where the interest payments are related to a floating interest rate such as LIBOR. In the simplest case the coupons would be based on the corresponding LIBOR rate with no adjustment.