Which of the Following Statements About the Notional Amount of an Interest-Rate

question 131

Multiple Choice

Which of the following statements about the notional amount of an interest-rate swap is correct?

• A) The notional amount is just another term for the swap dealer's profit
• B) The notional amount is added to the lowest fixed rate available and shared between the counterparties
• C) The notional amount is the amount that is subject to this swap, but not exchanged
• D) The notional amount is the loan amount exchanged in the swap

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Definitions:

Apparent Authority

The appearance or assumption of authority based on the actions or representations of the principal, leading others to believe that an agent is authorized.

Settlement Agreement

A legally binding contract where parties in a dispute agree on specific terms to resolve the matter without further litigation.

Wrongful Expulsion

An unjust or improper removal or exclusion of an individual from a group, organization, or place.

Implied Authority

The authority of an agent that arises by inference from the words and actions of the principal.