Rate Cap: The limit on the amount the interest rate can be increased at each adjustment period in an adjustable rate loan. The cap may also set the maximum interest rate that can be charged during the life of the loan.

 

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Rate Cap: The limit on the amount the interest rate can be increased at each adjustment period in an adjustable rate loan. The cap may also set the maximum interest rate that can be charged during the . . . View Full Definition

Interest Cap: The maximum interest rate increase of an Adjustable Mortgage Loan. For example: a 120% loan with a 5% interest rate cap would have maximum interest for the life of the loan which would not e . . . View Full Definition

Interest Rate Futures Contract: An interest rate agreement in which payments are made when the reference rate falls below the strike rate. Related: Interest rate cap.

Adjustable-Rate Mortgage (ARM): A mortgage that features predetermined adjustments of the loan interest rate at regular intervals based on an established index. The interest rate is adjusted at each interval to a rate equi . . . View Full Definition

Cap: Composed of a layer of warmer, dryer air aloft which may suppress or delay the development of thunderstorms. As an air parcel rises, it becomes cooler relative to the ambient, or surrounding . . . View Full Definition

Morgan Stanley Capital International (MSCI): Publisher of a number of well-known benchmarks, such as the MSCI World Index.

Nominal Interest Rate: The stated interest rate in a note or contract, which may differ from the true or effective interest rate, especially if the lender discounts the loan and advances less than the full amount.

Nondiversifiability Of Human Capital: The difficulty of hedging one's human capital (the unique capabilities and expertise of individuals) and employment effort.

Nominal Exchange Rate: The actual foreign exchange quotation in contrast to the real exchange rate, which has been adjusted for changes in purchasing power.

Nominal Annual Rate: An effective rate per period multiplied by the number of periods in a year. Same as annual percentage rate.