When hedging interest rate risk, derivative instruments like interest rate cap and interest rate floors can be utilised. An interest rate cap provides a bank, a company or an individual who has borrowed on a floating basis with a hedge against increasing rates, by setting a pre-specified maximum rate (i.e. a cap), while retaining the right to benefit from decreasing interest rates. An interest rate floor enables an investor of surplus funds on a floating basis to protect itself against decreasing interest rates, by setting a pre-specified minimum rate (i.e. a floor), while retaining the right to benefit from increasing interest rates. What is this pre-specified rate called? O a. Strike rate O b. Floor rate C. Cap rate O d. Benchmark rate