Which of a) through d) is NOT TRUE of a swap if the principal amounts are in the same currency?
A) The notional principal is exchanged.
B) The swap is an interest rate swap.
C) The principal amount is used to calculate the interest payments.
D) Only the difference check between the two interest payments is exchanged.
E) All of the above are true.

Question

Quizplus · Accepted Answer

In a swap where the principal amounts are in the same currency, the notional principal is typically not exchanged; only the interest payments or their differences are exchanged. This is because the principal amounts are often a reference amount used to calculate the interest payments, and exchanging them would not affect the economics of the deal but could unnecessarily increase transaction costs.

Which of A) Through D) Is NOT TRUE of a Swap