Interest rate cap

Definition:

An interest rate agreement in which payments are made when the reference rate exceeds the strike rate. Also called an interest rate ceiling. Related: Interest rate floor.

Investing Essentials


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

Term of the Day

Good-this-Month order (GTM)

An order to buy or sell securities that continues to be a valid order until the end of the current month.

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