Definition of 'Fairway Bond'
A type of bond that accrues interest if the embedded index or interest-rate option underlying the bond remains within a specified range. The fairway in golf is like the index or interest rate range. The outlook is positive if the ball lands on the fairway; if a ball lands in the rough, the outlook is negative.
Also known as "corridor bond", "index range note", "range accrual note", or "index floater".
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