Municipal Bonds
Which security has a stated maturity, floating interest rate, and an option for the investor to put it back daily or weekly?
VRDNs: floating rate + put feature = liquidity. Common in money market funds.
Complete Analysis & Legal Rationale
Variable Rate Demand Notes (VRDNs) are municipal securities with floating rates that reset frequently and include a put feature allowing investors to tender (put back) the notes daily or weekly at par.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Put options are derivative contracts, not debt securities with these features.
Perpetual preferred has no maturity and no put feature.
Matches the verified teaching point in the explanation.
Variable annuities are insurance products without put features.
Official Standard: Governs options accounts, approvals, and related supervisory requirements (verify current text).
Official Standard: Fair dealing obligations in municipal securities activities (verify current text).
Official Standard: Outline-level citation pending rule-specific upgrade. Verify against current FINRA Series 7 outline.