What does cap mean in finance?

The term “ cap is an acronym for capitalization. It refers to the total amount of money that a business has invested in its assets. This includes the value of any tangible assets, such as equipment, inventory, and real estate. It also includes the value of intangible assets, such as a company’s brand, intellectual property, and workforce.

What is a mandatory cap mean in finance?

A mandatory cap is a limit on the amount of a withdrawal, such as a withdrawal from your savings account or retirement account. When you reach the cap, you can't withdraw any more money from that account. This is usually to protect the account balance from being reduced or lost entirely if someone should withdraw enough to dip below the balance. Another reason for mandatory caps is so that the money isn't used for more than one purpose.

What is a capped growth rate mean in finance?

A capped growth rate means that an investment’s annual return can’t exceed a certain percentage. In other words, the return on your money will be capped at a fixed percentage. If you want to invest in a real estate investment trust (REIT), which are often capped at around 6%, that’s a capped growth rate. If you invested in a stock, the annual growth rate would be capped at around 10%.

What is a cap on income mean in finance?

A cap on income is a total of all of your sources of income that you are required to report to the IRS each year and meet certain eligibility requirements. It includes wages and salaries, business income, self-employment income, rental income, and interest and dividends. You can also deduct certain expenses, like medical expenses, from your adjusted gross income, but that's not what we're looking at here.

What is a capped growth rate mean in a contract?

The capped growth rate is the upper limit on how much the investment’s value can grow over a given time period, usually adjusted for inflation. It also is the upper limit on the potential return of the investment. For example, if you have $500 invested in a stock mutual fund with a 5% annual growth rate, any appreciation above that growth rate would be added to the original $500 principal. If the fund’s annual return is lower than 5%, you would lose money on