_____________is an agreement whereby the seller of the floor, for a fee, to pay the buyer when the actual interest rate falls below the strike rate.

Question

Quizplus · Accepted Answer

An interest rate floor is a derivative contract in which the seller agrees to pay the buyer when the actual interest rate falls below a specified level, known as the strike rate. This is designed to provide the buyer with protection against falling interest rates.

_____________Is an Agreement Whereby the Seller of the Floor, for a Fee