In a zero cost collar,the exercise price on the floor is set such that the floor premium more than offsets the cap premium.
Correct Answer:
Verified
Q48: An FRA is similar to any type
Q49: Interest rate caps are equivalent to a
Q50: The payoff of a long interest rate
Q51: In a 12 x 18 FRA,the derivative
Q52: A long cap and a long floor
Q54: The value of an FRA is obtained
Q55: The appropriate fixed rate on an FRA
Q56: An off-market FRA is one constructed outside
Q57: An interest rate floor is a combination
Q58: In an FRA on an m-day rate,payment
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents