1) An interest rate collar or simply collar, is the purchase of a cap and the sale of a floor. A collar is constructed to reduce the cost of the cap.
2) The term collar can also be used to purchase a put and sell a call.
1) An interest rate collar or simply collar, is the purchase of a cap and the sale of a floor. A collar is constructed to reduce the cost of the cap.
2) The term collar can also be used to purchase a put and sell a call.