Periodic Cap Financial Glossary

What is it? The maximum amount by which an adjustable-rate securitys coupon rate can change in any given period of time. Also called reset cap. For most ARMs and floaters, the maximum periodic or reset change is defined as an amount of change in each consecutive 12-month period over the life of the security. Thus the term annual cap is also used to describe most periodic caps.

Finance Term Definition Added By: Hunter

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