inverse floater

0.03 sec.

Inverse floater

A derivative instrument whose coupon rate is linked to the market rate of interest in an inverse relationship.

inverse floater

A derivative security that has a yield that is inversely related to interest rates. Inverse floaters are one part of a long-term bond. A portion of the bond's current interest income is used to pay money market rates to holders of the regular floating-rate notes. The remainder of current interest and changes in the bond's market value are earned by holders of the inverse floaters. Holders of this type of security can have major losses as a result of increases in interest rates. These securities are used primarily, although not always successfully, by professional portfolio managers.

How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content.

?Page tools

Printer friendly
Cite / link
Email

Feedback
Add definition

? Mentioned in

? References in periodicals archive

Fairway Bond

Inverse Floating-Rate Note

The bulletin also describes the most common types of structured notes, including step-up bonds, index amortizing notes, dual index notes, deleveraged bonds, range bonds and inverse floaters.

House Banking Committee evaluates potential risks of structured notes by Journal of Accountancy

They're risky because they're frequently leveraged, meaning that for every half point change in interest rates, the coupon on the inverse floater could change by a factor of two, three or even four times.

The trick to managing cash? Be creative by Anderson, Alexander M. / Financial Executive

However, the increased concentration of inverse floaters may cause the portfolio's weighted average coupon to suffer as interest rates rise.

Fitch Affirms 7 Classes of Putnam Structured Product CDO 2001-1, Ltd by Business Wire

More results

Financial browser

? Full browser

inventory
Inventory Financing
Inventory Loan
Inventory Profit
Inventory Turnover
inventory valuation
inverse condemnation
inverse floater
Inverse Floating-Rate Note
Inverse order
inverted formation
inverted market
Inverted Saucer
inverted scale
Inverted Yield Curve

Inverse Discrete Stationary Wavelet Transform
Inverse Discrete Time Fourier Transform
Inverse Discrete Wavelet Packet Transform
Inverse Discrete Wavelet Transform
Inverse distance weighting
Inverse distance weighting
Inverse Document Frequency
Inverse Doppler effect
Inverse dynamics
Inverse Eigenvalue Problem
Inverse eigenvalues theorem
Inverse Elasticity Pricing Rule
inverse electrode current
Inverse Electron Demand Diels Alder
Inverse element
Inverse element

Inverse elements
Inverse elements
Inverse Faraday effect
Inverse Fast Fourier Transform
Inverse Fast Fourier Transform With Windowing
inverse feedback
Inverse figures
Inverse filter
inverse floater
Inverse floating-rate note
Inverse Fourier In-Phase Multiplets
Inverse Fourier transform
Inverse Free Electron Laser
Inverse Frequency Response Function
inverse function
inverse function
inverse function

inverse function
Inverse function theorem
Inverse function theorem
Inverse functions
Inverse functions
Inverse functions
Inverse functions and differentiation
Inverse Gain
Inverse Galois problem
Inverse Galois theory
Inverse gambler fallacy
Inverse gambler's fallacy
Inverse gamblers fallacy
Inverse gamma distribution
Inverse Gaussian distribution
Inverse graph

Financial Dictionary

Free Tools:	For surfers: Free toolbar & extensions \| Word of the Day \| Help For webmasters: Free content \| Linking \| Lookup box \| Double-click lookup \| Partner with us

All content on this website, including dictionary, thesaurus, literature, geography, and other reference data is for informational purposes only. This information should not be considered complete, up to date, and is not intended to be used in place of a visit, consultation, or advice of a legal, medical, or any other professional. Terms of Use.