Notional principal and Paasche index: Difference between pages

Revision as of 14:20, 23 October 2012

A weighted index using quantities entirely from the current year's data.

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-Notional principal is the base amount on which the settlement of a derivative instrument - such as an Forward Rate Agreement (FRA) or a swap - is calculated.
+A weighted index using quantities entirely from the current year's data.
-The amount of notional principal would commonly be set equal to the principal amount of any underlying exposure being hedged.
 == See also ==
-* [[Derivative instrument]]
+* [[Laspeyres index]]
-* [[Forward rate agreement]]
-* [[Swap]]