caplet

  1. Noun.  A smooth-coated tablet (gloss, pill, as in medicine) shaped like a capsule, used as a tamper-resistant alternative to a capsule, or an easy-to-swallow alternative to regular tablets.
  2. Noun.  (finance) A component of an interest rate cap, a derivative instrument that effectively prevents the interest payments on an otherwise variable-rate loan from exceeding an agreed level (the "cap"). Each "caplet", analysable as a call option, covers one interest accrual period (such as three months); the whole interest rate cap is made up of a series of consecutive caplets.

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This entry was last updated on RefTopia from its source on 3/20/2012.