A call option on interest rates is called an

Name: A call option on interest rates is called an
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A call option on interest rates is called an interest rate cap. An interest rate cap is a contract that gives the holder the right, but not the obligation, to receive payments at the end of each period when the interest rate exceeds a predetermined level, known as the cap rate. This is used to limit exposure to interest rate moves above a certain level.

A Call Option on Interest Rates Is Called an