Interest rate swap

Definition:

A binding agreement between counterparties to exchange periodic interest payments on some predetermined dollar principal, which is called the notional principal amount. For example, one party will pay fixed and receive variable.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Tax evasion

Illegal by reducing tax burden by underreporting income, overstating deductions, or using illegal tax shelters.

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