FT MarketWatch

Interest rate collar

A security which combines the Purchase of a Cap and the sale of a Floor to specify a Range in which an Interest rate will fluctuate. The security insulates the buyer against the Risk of a significant rise in a Floating rate, but limits the benefits of a Drop in that floating rate.

Related Terms: 17 Buy, Benefit, Cap, Drop, ECU, ECI, Float, Floating rate, FICA, Floor, Interest, Interest rate, ITS, Purchase, Risk, Range, SEC
Other Related Pages: Category: Bonds Starting With: I
Semi Related Terms: 581 CLICK HERE TO VIEW
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