In an Interest Rate Swap, the Notional Principle

question 42

Multiple Choice

In an interest rate swap, the notional principle:

• A) is the difference in the fixed and floating interest rates.
• B) is the difference in the fixed and floating interest payments.
• C) is used to calculate the FRA basis.
• D) is used to calculate the value of the interest payments.
• E) is used to calculate the hedge ratio.

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