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