Valuation of Capped Floater (CFAI Book 5) versus Valuation of Caps (CFAI Book 6)

[inchvbeam]

Hi, struggling to get if the ‘cap’ mentioned in the two chapters below are the same:
Valuation of Capped Floater (CFAI Book 5; Chapter 45 - Valuation and Analysis: Bonds with Embedded Options):
where discussion was on ‘Value of a capped or floored floating-rate bond’
versus Valuation of Caps (CFAI Book 6; Chapter 49 - Option Market & Contracts)
where discussion was on ‘Options on Interest Rates: Caps and Floors’

 

[S2000magician]

They are.
In reading 45 the caps are embedded in the floating-rate bond, whereas in reading 49 they’re separately traded derivatives. But they’re the same thing, worth the same amount.

 

[inchvbeam]

Thank you very much as always!

 

[S2000magician]

My pleasure.