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Cap

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Cap

An upper limit on the interest rate on a floating-rate note (FRN) or an adjustable-rate mortgage (ARM). Also, an OTC derivatives contract consisting of a series of European interest rate call options; used to protect an issuer of floating-rate debt from interest rate increases. Each individual call option within the cap is called a caplet. Opposite of a floor.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Cap

1. Informal for market capitalization.

2. In a floating-rate note or an adjustable-rate mortgage (ARM), the highest possible interest rate. For example, if one has an adjustable-rate mortgage on a house, the interest rate fluctuates periodically. However, if the homeowner has a cap on the interest rate, there is a guarantee that it will never rise above a certain percent, no matter what the ARM formula would otherwise dictate. A cap is designed to protect the person or company making the interest payments. See also: Floor, Collar.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

cap

1. An upper limit on the interest rate to be paid on a floating-rate note.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

Cap.

A cap is a ceiling, or the highest level to which something can go.

For example, an interest rate cap limits the amount by which an interest rate can be increased over a specific period of time. A typical cap on an adjustable rate mortgage (ARM) limits interest rate increases to two percentage points annually and six percentage points over the term of the loan.

In a different example, the cap on your annual contribution to an individual retirement account (IRA) is $4,000 for 2006 and 2007 and $5,000 in 2008, provided you have earned at least that much. If you're 50 or older, you can make an additional catch-up contribution of $1,000 each year.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.

CAP

see COMMON AGRICULTURAL POLICY.
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005

cap

A ceiling on the adjustments that can be made in the payments or interest rate of an adjustable-rate loan.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.

Cap

Same as Float-Down.

The Mortgage Encyclopedia. Copyright © 2004 by Jack Guttentag. Used with permission of The McGraw-Hill Companies, Inc.
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References in periodicals archive
In our current study, chronic stress increased plaque vulnerability to rupture, characterized with thinner fibrous caps, larger lipid cores, more macrophages and new vessels but less SMCs and elastic fibers.
(a, b, c) Plaque erosion: adjacent thrombus (yellow arrows) overlying an intact fibrous cap.
Besides that, calcifications locating in the middle area (small [alpha]) of fibrous cap are seemly influenced more than those in the shoulder area (large [alpha]).
(30) Recently, a combination of multi-vessel IVUS and near-infrared spectroscopy techniques has exhibited promising efficacy in the detection of the development of inflamed fibroatheromas with thinner fibrous caps, greater plaques, and necrotic core areas possessing the characteristics of increased plaque instability.
More mature plaques (stable plaques) have a thick fibrous cap, which is less likely to rupture.
As the LRNC of the lesion enlarges, macrophages and lymphocytes infiltrate the fibrous cap, causing it to thin.
Plaques with large lipid cores and thin fibrous caps are vulnerable to rupture, resulting in thrombus formation and possible arterial occlusion.
Macrophages are capable of degrading extracellular matrix by phagocytosis or by secreting proteolytic enzymes such as plasminogen activators and a family of matrix metalloproteinases (collagenases, gelatinases and stromeolysins) which may weaken the fibrous cap, predisposing it to rupture.
Vulnerable plaques which are thought to be the precursors of ACS have thin fibrous cap, large lipid core, more inflammatory cells and less collagen (13,14).
Early studies reported evidence of local activation of inflammatory cells in the shoulder region of coronary plaques, with release of proteolytic enzymes (metalloproteinases) that degrade the extracellular matrix and contribute to the fibrous cap weakening and plaque instability (1-3).
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