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.

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.

cap

1. An upper limit on the interest rate to be paid on a floating-rate note.

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.

CAP

see COMMON AGRICULTURAL POLICY.

cap

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

Cap

Same as Float-Down.

References in periodicals archive ?
Injaz was cloned using ovarian cells of a camel and was applauded as a great scientific achievement throughout the world scientific community.
CAMEL FACTS LIFE EXPECTANCY: Between 40 and 50 years HEIGHT: Between 6ft and 7ft SPEED: Up to 40mph in short bursts WEIGHT: Bactrian up to 160st (1,000 kg), dromedaries up to 95st (600kg) HUMPS: Dromedary camels have one hump, Bactrian camels have two humps COLLECTIVE NOUN: Train
A six-month old camel is called Hawar; one year Makhlool; from one to two years Mafrood ; from two to three Hiq ; four years old is called Jitha; from five to six years old Thnai, while Al Fatir camel is a she camel that has given birth more than five times and considered old.
Camel milk has been a staple for desert Arab nomads for generations.
Barghout said that camel milk might also benefit such disorders as diabetes, which is highly prevalent in the UAE.
Camel is a hardy animal and has proved his worth in the long prevailing droughts in Balochistan, remained almost for 10 years (1994-2004).
Those who have been lucky enough to try camel milk soap never use regular soap again after experiencing the unique skin benefits of camel milk," said Monal Zeidan, co-founder, who also happens to be Nissan's marketing GM.
Joe and Rebecca Fosset (left) are the owners of Joseph's Amazing Camels .
The makers of the handmade organic camel milk soap hope to export camel milk soap bars all over the world from their Arabian base which represents the true home of the legendary camel.
NEUTRAL NECESSITIES If you make just one investment this season, make it a camel coat.
THE luxe sandy shade of camel is currently taking over the high street as we prepare to pack away any clothes that remind us of our brief fling with summer and prepare for the darker days of autumn.
A collaborative research team from King Abdulaziz City for Science and Technology (KACST), Saudi Arabia and BGI (Formerly known as Beijing Genomics Institute, headquarter at Shenzhen), People's Republic of China, is the first in the world to successfully map the full genome of Arabian camel (Camelus dromedarius).