CAPS, FLOORS AND COLLARS Definition

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CAPS, FLOORS AND COLLARS: CAP is a series of European interest rate call options used to protect against rate moves above a set strike level; FLOOR a series of European interest rate put options used to protect against rate moves below a set strike level; and, COLLAR is the simultaneous purchase of an interest rate cap and sale of an interest rate floor on the same index for the same maturity and notional principal amount.

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ACCOUNT is the detailed record of a particular asset, liability, owners equity, revenue or expense.

NONCALLABLE is a bond exempt from call by the issuer for a stated period of time.

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