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Notional
A predetermined amount of the underlying of a derivative that is used solely as a reference for the application of an exchange rate, an interest rate, a quoted market price or the value of an index.
For example, in a plain vanilla swap, the notional is used to establish the interest flows that will be exchanged. The notional itself is not swapped.
Translations
Synonyms and variations
- Notional amount
- Notional principal
- Notional principal amount
- Notional value