sir in interest rate options, i watched the videos but i just have one doubt
Do the cap floor and collar apply only to exchange traded interest rate options or also to interest rate guarantee(otc)?
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2y ago#1The cap, floor, and collar concepts can apply to both exchange-traded interest rate options and interest rate guarantees (OTC).
A cap involves setting a maximum interest rate, a floor sets a minimum interest rate, and a collar combines both a cap and a floor to create a range within which the interest rate is confined. These concepts can be used in both exchange-traded options and OTC arrangements.
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