Interest Rate Caps
Table of Contents
1. Example
Say you sold a floating rate note, which requires you to pay SOFR1 plus 2%.
The tenor is the time in between interest rate resets. Common tenors are 3 and 6 months.
- Notional:
- Term:
- Strike Rate:
- Tenor:
Footnotes:
1
Secured Overnight Funding Rate (the replacement for LIBOR).