Floating Rate

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Floating Rate

Interest rate that is reset periodically, usually every couple of months or sometimes daily.

Floating Rate

Floating rate.

A debt security or corporate preferred stock whose interest rate is adjusted periodically to reflect changing money market rates is known as a floating rate instrument.

These securities, for example five-year notes, are initially offered with an interest rate that is slightly below the rate being paid on comparable fixed-rate securities.

But because the rate is adjusted from time to time, its market price generally remains very close to the offering price, or par.

When a nation's currency moves up and down in value against the currency of another nation, the relationship between the two is described as a floating exchange rate.

For example, the US dollar is worth more Japanese yen in some periods and less in others. That movement is usually the result of what's happening in the economy of each of the nations and in the economies of their trading partners.

A fixed exchange rate, on the other hand, means that two (or more) currencies, such as the US dollar and the Bermuda dollar, always have the same relative value.

floating rate

A loan interest rate that is not fixed and does not have specified times for increase or decrease,but which floats and changes as the index changes.

References in periodicals archive ?
Our goal is to match liabilities and assets, and the way for us to get there is to swap out floating rates for fixed rates.
But, if rates fall, the LOWAR rate will adjust lower, similar to a conventional floating rate.
The floating rate with a cap offers the prepayment flexibility of a floating rate but with the protection of a maximum rate, or a cap.