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If a lender wishes to buy an OTC interest rate collar to hedge its exposure to a future decrease in interest rates this would require
If a lender wishes to buy an OTC interest rate collar to hedge its exposure to a future decrease in interest rates this would require it to:
A buy a floor at one exercise price, sell a cap at a lower exercise price
B buy a cap at one exercise price, sell a floor at a lower exercise price
C buy a cap and sell a floor at the same exercise price
D. buy a floor at one exercise price, sell a cap at a higher exercise price
Noted if is the borrower wishes is what answer?
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