Equity cap

Definition:

An agreement in which one party, for an up-front premium, agrees to pay the other at specific time periods if a designated stock market benchmark tops a predetermined level.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Graveyard market

Bear market in which investors who sell are faced with substantial losses, while potential investors prefer to stay liquid; that is, to keep their money in cash or cash equivalents until market... Read More

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