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In this tutorial, Ken Finn explains Variable Rate Demand Obligations (VRDOs), a misunderstood type of bond. He emphasizes that VRDOs have no interest rate risk due to their unique structure. When interest rates fluctuate, the bond's rate adjusts accordingly, ensuring that the holder remains aligned with current market rates. Additionally, VRDOs include an embedded put option, allowing investors to sell the bond back at face value ($1,000) whenever desired. While VRDOs are exposed to credit risk, they are protected against interest rate fluctuations, as they reset at intervals ranging from weekly to monthly.