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Knock-In Floor


A barrier floor whereby protection exists or activates (knocks in) only if the floating interest rate crosses the barrier (the pre-defined knock-in level) on a resetting/ rollover date.

For example, if the reference rate ended up, on a rollover date, below 3.5%, then the floor activates and protection against further declines (beyond 3.5%) will be in effect.



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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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