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  2. Interest rate cap and floor - Wikipedia

    en.wikipedia.org/wiki/Interest_rate_cap_and_floor

    A reverse interest rate collar is the simultaneous purchase of an interest rate floor and simultaneously selling an interest rate cap. The objective is to protect the bank from falling interest rates. The buyer selects the index rate and matches the maturity and notional principal amounts for the floor and cap.

  3. Interest rate ceiling - Wikipedia

    en.wikipedia.org/wiki/Interest_rate_ceiling

    The researcher [2] decided that to assess the appropriateness of an interest rate cap as a policy instrument (or whether other approaches would be more likely to achieve the desired outcomes of government) it was vital to consider what exactly makes up the interest rate and how banks and MFIs are able to justify rates that might be considered excessive.

  4. LIBOR market model - Wikipedia

    en.wikipedia.org/wiki/LIBOR_market_model

    Each forward rate is modeled by a lognormal process under its forward measure, i.e. a Black model leading to a Black formula for interest rate caps. This formula is the market standard to quote cap prices in terms of implied volatilities, hence the term "market model".

  5. Fixed vs. variable interest rates: How these rate types work ...

    www.aol.com/finance/fixed-vs-variable-interest...

    Many states also cap interest rates at 36% or lower for consumer loans. Lenders can also offer caps on variable rates in addition to government protections. This is common particularly with ...

  6. A cap on interest rates could diminish credit card rewards - AOL

    www.aol.com/finance/bill-congress-cap-credit...

    A new bill in Congress would cap credit card interest rates at 10%. But the limits could harm consumers, experts warn. Preston Fore. February 6, 2025 at 3:01 AM. Chip Somodevilla—Getty Images.

  7. High-yield savings accounts vs. CDs: Which is best for ... - AOL

    www.aol.com/finance/high-yield-savings-account...

    Benefits of an HYSA. Competitive returns. Even after recent Fed rate cuts, high-yield savings accounts still earn up to 10 times the national average savings rate — and considerably more than a ...

  8. Bond option - Wikipedia

    en.wikipedia.org/wiki/Bond_option

    European Put options on zero coupon bonds can be seen to be equivalent to suitable caplets, i.e. interest rate cap components, whereas call options can be seen to be equivalent to suitable floorlets, i.e. components of interest rate floors. See for example Brigo and Mercurio (2001), who also discuss bond options valuation with different models.

  9. Inflation derivative - Wikipedia

    en.wikipedia.org/wiki/Inflation_derivative

    Even though the coupons are paid monthly, the inflation rate used is still the year-on-year rate. Options on inflation including interest rate cap and floors and straddles can also be traded. These are typically priced against YOY swaps, whilst the swaption is priced on the ZC curve.