| Auction Market Preferred Stock (AMPS) |
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A type of preferred stock which has its dividend rate reset by Dutch auction. The interest rate on the stock generally has a ceiling, and the dividend rate is often reset every forty-nine days. It is a type of floating-rate investment.
The auction market preferred stock can be a beneficial investment for larger investors. The auction process will most likely reveal the current market yield for less-risky asset classes, such as preferred stock, and will self-adjust for the effects of alternative investments and inflation.
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