top button
Flag Notify
    Connect to us
      Site Registration

Site Registration

What is the meaning of the term National Principal in the case of swap transactions?

+1 vote
192 views
What is the meaning of the term National Principal in the case of swap transactions?
posted Jul 4, 2017 by Diya Borda

Share this question
Facebook Share Button Twitter Share Button LinkedIn Share Button

1 Answer

0 votes

The national principal amount, in an interest rate swap, is the predetermined dollar amounts on which the exchanged interest payments are based. The notional principal never changes hands in the transaction, which is why it is considered notional, or theoretical. Neither party pays nor receives the notional principal amount at any time; only interest rate payments change hands.

answer Jul 4, 2017 by Debolina Charaborthy
...