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Collar
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Portfolio and Collar (1) A feature of a debt contract or a separate agreement that puts both a cap (ceiling) and a floor (minimum) on the interest rate. Also called Min Max. (2) An option contract or set of contracts that limits downside risk in any underlying below a floor price and eliminates upside participation beyond a cap price. Also called Fence or Fence Spread, Hedge Wrap. See Choke, Interest Rate Collar (diagram), Equity Risk Reversal (diagram), Floor (1) (diagram), Partial Collar (diagram), Participating Collar (diagram).
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