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  • March 18, 2021
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Flexible Cap

An interest rate cap in which the number of caplets are less than reset periods. This feature makes a flexible cap cheaper to buy than an ordinary cap (vanilla cap). But of course, that comes at a cost, where protection offered to the flexible cap buyers against upward movement in interest rates would also be less than usual.

The flexible cap is also referred to as a Mulligan cap.


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