Explain the Concept of Notional Principal Used in Swaps

question 114

Essay

Explain the concept of notional principal used in swaps.

---

Definitions:

Business Reporting

Business reporting involves the preparation and presentation of information about a company's performance to stakeholders.

Decision Processes

The series of steps or stages involved in selecting among alternatives based on criteria and eventual outcomes.

Reporting Principles

The foundational guidelines that govern the preparation and presentation of financial reports, ensuring accuracy, consistency, and transparency.

Historical Cost Principle

An accounting principle that requires financial statements to be based on the original cost of an asset, rather than its current market value.