Interest rate collar to hedge floating-rate bond

Schweser mock 2 AM Q 47: Reichmann would like to hedge the interest rate risk of one of his bonds, a floating-rate bond indexed to LIBOR. What would be the most appropriate way for him to construct an interest rate collar to hedge the fixed-rate portion of the portfolio?

A. Buy the floor and buy the cap.

B. Buy the floor and sell the cap.

C. Sell the floor and buy the cap.

The answer is C, but I don’t get it. As far as I know, if an investor has a LIBOR-based asset, he would buy the floor and sell the cap to lock in the returns. Is there an error or I am just missing something here?

He is holding a floating-rate bond and wants to hedge interest rate risk. When I read “hedge interest rate risk”, I often equate it as wanting to offset his losses in case interest rates rise and he has to make higher payments. This would mean that it is a LIBOR-based liability.

He will want a cap to offset his extra payment to the other party and limit his loss. Also, he will sell a put to partially finance the cap, in the scenario that the interest rate falls, his gains will be paid out. Therefore, he has in a “collar” with a floor and cap.