Q614
Position which occurs because of selling floor and buying cap is classified as
A.
floating collar
B.
fixed collar
C.
currency collar
D.
collar
AnswerAnswer: Option D
Solution
Answer: Option D
Solution:
Position which occurs because of selling floor and buying cap is classified as collar. A collar, commonly known as a hedge wrapper, is an options strategy implemented to protect against large losses, but it also limits large gains.