The Real Exposure of an Interest or Currency Swap Is

question 11

True/False

The real exposure of an interest or currency swap is not the total notional principal, but the mark-to-market values of differentials in interest or currency interest payments since the inception of the swap agreement.

---

Definitions:

Productive Efficiency

The production of a good in the least costly way; occurs when production takes place at the output at which average total cost is a minimum and marginal product per dollar’s worth of input is the same for all inputs.

Production Cost

The total expenses incurred in the process of producing or manufacturing goods, including materials, labor, and overhead costs.

Rental Payments

Monetary payments made periodically by a tenant to a landlord in exchange for the use of a property or equipment.

Society's Viewpoint

The collective perceptions, attitudes, and values of a community or society regarding various issues.