R
   
   Reverse Interest Rate Collar
   















 

R

Reverse Interest Rate Collar

A combination of an interest rate collar and a reverse floating rate note, the reverse interest rate collar provides an interest cost or yield that decreases as rates rise and increases as market rates fall within a range. This structure might appeal to a liability manager who has too much floating rate exposure or to an asset manager who is constrained as to allowable portfolio duration but who expects rates to decline. Also called Reverse Forward Rate Bracket. See also Reverse Equity Risk Reversal (diagram).

Glossary * R