Which of A) Through D) Is NOT TRUE of a Swap

question 13

Multiple Choice

Which of a) through d) is NOT TRUE of a swap if the principal amounts are in the same currency?

• A) The notional principal is exchanged.
• B) The swap is an interest rate swap.
• C) The principal amount is used to calculate the interest payments.
• D) Only the difference check between the two interest payments is exchanged.
• E) All of the above are true.

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Definitions:

Nontaxable Income

Income that is not subject to income tax at the federal, state, or local level.

Alimony Payment

A financial support that one ex-spouse is legally obligated to provide to the other during or after the process of legal separation or divorce.

Child Support Payment

Payments made by a noncustodial parent to support their child or children's living expenses.

Provisional Income

Income that is not guaranteed or fixed, often used in reference to determining the taxability of certain benefits such as Social Security.