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Postby » Mon Oct 07, 2013 2:13 am

What is reverse floater , does reverse floater exposed to an increase in interest rates?

Finance Junkie
Posts: 258
Joined: Thu Sep 20, 2012 3:42 pm


Postby pradeeppdy » Mon Oct 07, 2013 5:52 am

Such a floating rate securities to which coupon payment is derived from some formula. For example, 12% - LIBOR

Here the LIBOR can be go up or down based on rate.It can also depend upon some another interest rate or condition. So, If the LIBOR go up by 1% it can go down by 1%.

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