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I'm aware that there exist different day count conventions for rates depending on the market but I'm still confused when it comes to the way interest rates are quoted on the market. Example if LIBOR is quoted at 5% what is the compounding associated with it. If we assume a 30/360 day count convention and I invest $100 at LIBOR what will I get at the end of that year?

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  • What do you mean by "invest in LIBOR"? LIBOR is not a product - it is an average of rates. Whatever you invest in that references LIBOR will determine the day count convention and compounding period. The LIBOR rate that is used will typically follow the compounding period.
    – D Stanley
    Nov 15 '19 at 13:30

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