Take, for example, one indicator of the market's appetite for risk, the spread between swaps of fixed- and floating-rate interest payments (see chart).

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Floating-rate funds are pools of bank loans made to companies, and the interest rates on those loans adjust as interest rates change.

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The company estimates that the savings from interest payments -- a big chunk of the borrowings carry floating-rate terms -- would make up for the foregone profits from the sold assets.

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Still, floating-rate bond funds may be the best fixed-income deal available in an environment of rising short-term interest rates.

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