 In this section, I will be telling you about the caps and the floors on the interest rate. So, due to certain market forces, there may be a possibility that the interest rates that are charged on the variable rate credit products, they can go up to a very high level. So, in order to protect the borrowers, the policy makers sometimes apply this concept of putting a cap, which is basically the upper limit that is imposed and they tell the borrowers that the interest rate that we are going to charge on a certain product will not exceed this particular value, which is defined as the cap. So, we have got multiple products where they say that the sellers or the offerers of that particular financial instrument, they say that the variable interest rate will be charged. The interest rate will fluctuate, but then in order to protect the borrower, they also tell the borrowers that there is going to be a cap beyond which the interest rate will not go. And one such example where this concept of caps is applied is adjustable rate mortgages which are which is abbreviated as arms. So in this case, the offerers of this particular, the different types of mortgages, they say that we are going to put up, we are going to offer you a cap also that beyond this particular value, the interest rate will not go up, whatever will be the situation in the market. So, there may be a possibility that the interest rate is increased to a considerably high level, but because of this cap, it is assured that the interest rate will not go beyond this upper limit. So, when we look at the definition of this concept, it is the upper limit which is imposed on the variable interest rate products and it is usually applied in the context when we are dealing with products whose interest rates are determined on the basis of two things. One is the indexed rate and the other is the spread. So, there is there is this index rates which is based upon the overall value which is which the investors are willing to offer for that particular type of category of product or type of instrument financial. We are obviously dealing with the financial products and then there is this spread or margin which can be like the offerers of this particular financial instrument can say that the spread or the margin can be plus minus two. So, that would be at the top of that particular index rate which is considered as the benchmark. So, if we are dealing with the products that are that are based upon variable rate and they are for the for the determination of the interest rate, they are going to use this index as the benchmark and then they are going to use this concept of spread. So, in that kind of a product, we see this concept of caps on the interest rate that are applied. So, what what basically is there are certain institutions which offer these kinds of products and the spread value is offered or determined by the underwriters. When we look at the definition of underwriter, underwriter is basically any party or any entity that evaluates and assumes that evaluates a financial product or they are going to assess the riskiness associated with any party. So, they assess the riskiness associated with any party or any financial instrument and then they say that this is the extent of fluctuations or the variation in the in the rate of return which they may offer. So, these underwriters give you the value that is used for determination of the spread and usually what are the different bodies that can be considered as the examples of underwriters. We have got agents and brokers that do this particular activity to assess the associated risk with a certain financial instrument, financial product and they get charged, they take commission to do this particular activity. They calculate the associated risks and on the basis of that, they define that this would be the value in the fluctuation which is termed as the spread. So, when we look at the advantages of putting a cap on the interest rates, as I said that this is the highest possible value, a product can charge in terms of the interest rates. So, basically if you are going to put a ceiling or a cap on interest rate for a certain financial instrument that always facilitates the borrowers that they are sure they are confident that this could be the highest possible value we will have to pay if we are borrowing money or we are buying this particular variable rate credit product from an institution. Now there is another concept, another similar concept which is called the floors on interest rates. So, it's not just the upper limit that is imposed by the investment companies, they also put up the floors along with the caps or there could be just the floor. So, as the name says, as the name explicitly specifies that floor would be the lowest value of the interest rate and when we look at the caps, they are the highest values and the interest can go up to. Similarly, the floor would be the lowest value the interest rate can go to and when we say that who is going to be benefited who will be in an in the advantageous position if the floor is imposed by the company or the financial institution which is offering these kinds of products where the floor has been defined and they are they are shared. The floor is basically imposed to protect the lenders on the contrary when we are talking about the caps, they are for the benefit of the borrower. So there could be a variable rate financial instruments or financial products in which both caps and the floors can be there. So basically they put a lowest value that this would be the lowest interest that can be charged depending upon the market situations, depending upon the values of the index rate and the spread associated with that particular financial instrument and then at the same time they can offer a cap so that this would be the highest value the interest rate can be shared. So, simultaneously they can they are taking care of the lenders as well as the borrowers but there could be a a product a financial product where there could be only caps or there could be a third category of financial products in which they have only announced or told the they have developed this particular concept that they would they would they would be a floor and it is not necessary that in all cases there would be a floor and a cap so there could be combinations there could be cap and floor for a certain product there could be floor only there could be cap only so basically these are the strategies that are developed to protect the borrowers and or the lender.