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Derivatives




Weighted Collar


An equity risk reversal in which the amounts covered by the cap leg and the floor leg are not equal. Rather, each leg is differently weighted. In other words, a weighted collar involves purchasing a cap (long cap) and selling a floor (short floor), both constituting the collar, where the cap and floor are written for different notional amounts.



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Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on ...
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