A type of capped floored floating rate note in which the capped coupon varies over the life of the note/ bond. An example is a bond that pays a floating coupon that is subject to a cap rate (say 6%) whose level is stepped (up) from time to time: it adjusts by steps of 0.3% upward. This floating rate note helps an investor adjust a previously set cap even higher depending on prevailing market rates at the time.
Derivatives
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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