floorlet

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English[edit]

Etymology[edit]

floor +‎ -let

Noun[edit]

floorlet (plural floorlets)

  1. (finance) A component of an interest rate floor, a derivative instrument that effectively prevents the interest payments on an otherwise variable-rate loan from falling below an agreed level (the "floor"). Each "floorlet", analysable as a put option, covers one interest accrual period (such as three months); the whole interest rate floor is made up of a series of consecutive floorlets.