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 Equity and Fiscal Responsibility Act of 1983

The law requiring federal income tax withholding on payments of dividend and interest to accounts without a certified tax identification number on file. See: W-9.

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