Interest rate agreement

An agreement whereby one party, for an upfront premium, agrees to compensate the other at specific time periods if a designated interest rate (the reference rate) is different from a predetermined level (the strike rate). The New York Times Financial Glossary

Financial and business terms. 2012.

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  • interest rate agreement — An agreement whereby one party, for an up front premium, agrees to compensate the other at specific time periods if a designated interest rate (the reference rate) is different from a predetermined level (the strike rate ). Bloomberg Financial… …   Financial and business terms

  • Interest rate cap — Also called an interest rate ceiling, an interest rate agreement in which payments are made when the reference rate exceeds the strike rate. The New York Times Financial Glossary …   Financial and business terms

  • interest rate cap — See cap. American Banker Glossary An interest rate agreement in which payments are made when the reference rate exceeds the strike rate. Also called an interest rate ceiling. Bloomberg Financial Dictionary …   Financial and business terms

  • interest rate floor — See floor. American Banker Glossary An interest rate agreement in which payments are made when the reference rate falls below the strike rate. Related: interest rate cap. Bloomberg Financial Dictionary …   Financial and business terms

  • Interest rate floor — An interest rate agreement in which payments are made when the reference rate falls below the strike rate. The New York Times Financial Glossary …   Financial and business terms

  • Interest rate cap and floor — Interest rate c An interest rate cap is a derivative in which the buyer receives payments at the end of each period in which the interest rate exceeds the agreed strike price. An example of a cap would be an agreement to receive a payment for… …   Wikipedia

  • interest rate swap — An agreement under which two parties agree to exchange or swap a series of payments corresponding to each other s interest payment obligations. See also swap. + interest rate swap USA A type of over the counter derivative (OTC derivative) under… …   Law dictionary

  • interest rate swap — A financial instrument representing a transaction in which two parties agree to swap or exchange net cash flows, on agreed upon dates, for an agreed upon period of time, for interest on an agreed upon principal amount. The agreed upon principal… …   Financial and business terms

  • Interest rate derivative — An interest rate derivative is a derivative where the underlying asset is the right to pay or receive a (usually notional) amount of money at a given interest rate.The interest rate derivatives market is the largest derivatives market in the… …   Wikipedia

  • interest rate — The percentage of an amount of money which is paid for its use for a specified time. Commonly expressed as an annual percentage rate (APR). Federal and state laws regulate interest rate amounts and disclosures on consumer loans. See annual… …   Black's law dictionary

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