adjustable-rate preferred stock

Adjustable-rate preferred stock (ARPS)

Publicly traded issues that may be collateralized by mortgages and MBS

Adjustable-Rate Preferred Stock

A preferred stock paying a dividend that varies from time to time. Usually the dividend rate is the same as the interest rate on a Treasury security, which is adjusted quarterly. They may also be backed by mortgages or mortgage-backed securities. ARPS's tend to have stable prices because a drop in the common share's price is offset by a rise in bonds, and vice versa.

adjustable-rate preferred stock

See floating-rate preferred stock.