The principal in an interest rate swap is:
A) always transferred from the originator to the counterparty of the swap.
B) is usually held by a clearinghouse to guarantee payment.
C) usually borrowed from a third party.
D) is not borrowed, lent, or exchanged. It just serves as the basis for the calculation of cash flows.

Question

Quizplus · Accepted Answer

The principal in an interest rate swap is not borrowed, lent, or exchanged. It just serves as the basis for the calculation of cash flows.

The Principal in an Interest Rate Swap Is