Home
E-Mail
Latest

Cap Financial Glossary

What is it? A limit placed on adjustments in adjustable rate mortgages to protect the borrower from large increases in the interest rate or the payment level.

Finance Term Definition Added By: Molly

The Cap definition has been viewed 2262 Time(s)!




Send To Friends!

If you'd like to send the Cap definition to yourself or to your friends/colleagues, just enter the e-mail addresses in the boxes below -





We hope you now understand the meaning of Cap. If you need any more information on this term, please don't hesitate to contact us.

Other Similar Finance Terms:

Financial Term OVAL is Overvalued

Financial Term Log Out, Sign Out is The act of ending a work session or disconnecting from another computer (see Log In, above).

Financial Term Backwardation is A term used in the futures industry when the price of each futures delivery month becomes progressively lower and lower. e.g. the spot contracts price is higher than the second contract month.

Financial Term economic value of equity (EVE) is One measure of exposure to interest rate risk. The difference between the sum of the present values of all cash flows from assets and the sum of the present values of all cash flows from liabilities. This difference is a proxy or estimate used for capital when the sensitivity of capital to changes in prevailing interest rates is calculated. The rate risk exposure target focuses on the amount of change in the economic value of equity that might result from a change in prevailing interest rates. It is a long-term, economic target for measuring rate risk exposure. Previously known by the less-accurate name market value of portfolio equity or MVPE. Sometimes called net portfolio value (NPV).

Financial Term optionadjusted duration is A duration measure that does allow for changes in cash flows as yields change A variation of effective or empirical duration. Option adjusted duration incorporates the expected duration-shortening effect of an issuers embedded call provision. It is also called adjusted duration.