Question: 7. Interest rate caps, floors, and collars 1. 2. 3. STEP: 2 of 3 The simultaneous (1) purchase of an interest rate derivative that offers

7. Interest rate caps, floors, and collars 1. 2. 3. STEP:

7. Interest rate caps, floors, and collars 1. 2. 3. STEP: 2 of 3 The simultaneous (1) purchase of an interest rate derivative that offers payments in periods when the specific interest rate index exceeds a specific interest rate and (2) sale of an interest rate derivative that offers payments in periods when the specific interest rate index falls below a specific interest rate is called a(n): O Interest rate collar O Plain vanilla swap Interest rate floor O Interest rate cap

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