Definitions for "notional principal amount"
In an interest rate swap, the specified dollar amount on which the exchanged interest payments are based.
The predetermined amount in an interest rate swap on which the exchanged interest payments are based.
The hypothetical amount on which interest rate swap payments are based. The notional principal amount in an interest rate swap generally is not paid or received by either party.
In derivatives contract, the proportion of underlying assets used to calculate the obligations between the different parties.