auction rate security

Definition of "auction rate security"
  1. A type of municipal debt security where the interest rate is reset at each payment date through a Dutch auction
How to use "auction rate security" in a sentence
  1. The municipality decided to finance its new infrastructure project through an auction rate security.
  2. After studying various investment options, John chose to invest in auction rate security for its unique yield reset model.
  3. The financial advisor explained that the interest rate of the auction rate security is determined through a Dutch auction at each payment date.

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