theoretical principal underlying the swap is termed the
A)basis amount
B)swap differential
C)notional principal
D)arbitrage principal

Question

Quizplus · Accepted Answer

The theoretical principal underlying a swap is known as the notional principal, which is a hypothetical amount that is used to calculate interest payments and other financial metrics. The notional principal is not actually exchanged between the parties involved in a swap, but rather serves as a reference point for determining cash flows and payments. Choices A, B, and D are not correct in describing the principal underlying a swap.

Theoretical Principal Underlying the Swap Is Termed the