23-64 Using the proceeds from the simultaneous sale of a floor to finance the purchase of a cap is to open a position called a

Name: 23-64 Using the proceeds from the simultaneous sale of a floor to finance the purchase of a cap is to open a position called a
Brand: Quizplus
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Question

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A collar is a strategy where the proceeds from selling a floor (a put option) are used to finance the purchase of a cap (a call option), effectively limiting both the downside and upside potential.

23-64 Using the Proceeds from the Simultaneous Sale of a Floor