Why do you think caps and floors trade as portfolios of caplets and floorlets in interest rate

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Why do you think caps and floors trade as portfolios of caplets and floorlets in interest rate markets, whereas in equity markets, calls and puts directly trade?

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An Introduction to Derivative Securities Financial Markets and Risk Management

ISBN: 978-0393913071

1st edition

Authors: Robert A. Jarrow, Arkadev Chatterjee

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Question Posted: Dec 02, 2015 04:01 AM

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Why do you think caps and floors trade as portfolios of caplets and floorlets in interest rate

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In equity markets the equity trades as a single object Hence a single call hedg...View the full answer

An Introduction to Derivative Securities Financial Markets and Risk Management

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