Which of the Following Statements About the Notional Amount of an Interest-Rate

Multiple Choice

Which of the following statements about the notional amount of an interest-rate swap is correct?

A) The notional amount is just another term for the swap dealer's profit
B) The notional amount is added to the lowest fixed rate available and shared between the counterparties
C) The notional amount is the amount that is subject to this swap, but not exchanged
D) The notional amount is the loan amount exchanged in the swap