NOTIONAL PRINCIPAL
\nˈə͡ʊʃənə͡l pɹˈɪnsɪpə͡l], \nˈəʊʃənəl pɹˈɪnsɪpəl], \n_ˈəʊ_ʃ_ə_n_əl p_ɹ_ˈɪ_n_s_ɪ_p_əl]\
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The principal amount of the underlying debt that is referred to in interest rate swap deals. When the obligation to pay interest is discounted, the principal amount gains a fictitious attribute that results in the generation of a cash flow that depends on the terms of the swapping agreement.
By Henry Campbell Black
Word of the day
hydromorphic
- [Greek] Structurally adapted to an aquatic environment, as organs of water plants.
Nearby Words
- notio
- notion
- notionable
- notional
- notional demand
- NOTIONAL PRINCIPAL
- notionality
- notionally
- notionate
- notionist
- notions counter