The maximum interest rate paid on a floating rate security by its issuer. The seller gives funds to cover interest payments over a specified rate. Also applies to an adjustable rate mortgage. See also: collar;...

Separating the part of interest payments in excess of real interest payments and then capitalizing it by adding it to the long-term...

An interest rate cap is a derivative in which the buyer receives money at the end of each period in which an interest rate exceeds the agreed strike price. An example of a cap would be an agreement to receive money for each month the LIBOR rate exceeds...