This is the goverment the rounders warned us about cap

This is the goverment the rounders warned us about cap

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This is the goverment the rounders warned us about cap

A cap is a term borrowed to define the maximum rate at which a particular asset will be sold in a transaction. This is the goverment the rounders warned us about cap . When a buyer makes an offer to purchase a security, it will be the seller’s responsibility to match the offer price with the cap price so that the buyer can make an offer for purchase. If the offer is made, the seller must either match the bid or allow for a Buyer Bid. A cap price is determined by the seller and the buyer. Why do we use the cap price instead of the rate? Well, for one thing it eliminates the possibility that the buyer will back out of the deal at the last minute when the fixed interest rates kick in. It also eliminates the possibility that the seller will raise his or her asking price beyond the cap price to get more money for his/her property. So, why would you care about cap prices instead of interest rates when choosing a fixedrate or even an adjustable rate credit product? This is the goverment the rounders warned us about cap . Well, cap prices are actually a better way to choose because they eliminate some risks that are inherent with interest rates. 

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