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Derivatives




Chooser Flexible Cap


A modification of the flexible cap. It combines the features of a flexible cap and a chooser cap. More specifically, it is an interest rate cap that allows the holder to put off using caplets till a later date if reference rate has marginally edged above the cap rate on an early reset date, rather than have them automatically exercised. This offers the holder more flexibility, where he chooses not to utilize the cap now, and wait till it gets more valuable.



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Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on ...
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