TeachMeFinance.com - explain Collar
collar -- (1) the highest and lowest rates of interest that will be paid on the face value of a floating-rate note. (2) an agreement between a buyer and seller. The buyer pays a fee to the seller. In return, the seller will pay the buyer if a designated floating index rate rises above or falls below a specified range of fixed rates. See cap. See floor.
Collar -- An agreement that puts upper and lower limits on the interest rate of a financial instrument or on the price of something, and through this device limits the possible amount of loss or gain from the rise or fall of interest or price of the thing "collared"
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