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English definition of “cap and collar”

cap and collar

noun [S]    
BANKING, FINANCE an agreement in which a financial organization puts an upper (= the cap) and a lower (= the collar) limit on an interest rate for a loan, a share price, etc.: When interest rates are expected to rise, a cap and collar mortgage becomes more attractive to borrowers.
(Definition of cap and collar noun from the Cambridge Business English Dictionary © Cambridge University Press)
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