# inverse floater

- Bonds whose coupon rates increase as rates decline and decrease as rates rise. The coupon rate is based on a formula using an index and moves in the opposite direction of changes in that index. Some inverse floaters may be a type of structured note. Other inverse floaters, such as interest-only ( I/O) and principal-only ( P/O) strips are types of collateralized mortgage obligations (CMOs).
__American Banker Glossary__————A derivative instrument whose coupon rate is linked to the market rate of interest in an inverse relationship.__Bloomberg Financial Dictionary__————A bond with a coupon rate structured to move in the opposite direction of interest rates.__Exchange Handbook Glossary__

*Financial and business terms.
2012.*

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