Calculating Accrued Interest in the Money Markets

Calculating Accrued Interest in the Money Markets

Abdulla explains how interest is actually calculated in the money markets using day count conventions and interest accrual: the two major global money market conventions.
Overview

The money markets use a relevant day count in order to calculate the appropriate amount of accrued interest. Different geographical regions use different day counts thus leading to necessary adjustments.

Key learning objectives:

  • Define the money markets

  • Understand the differences in day count conventions

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Summary
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Expert
Abdulla Javeri

Abdulla Javeri

Abdulla’s career in the financial markets started in 1990 when he entered the trading floor of the London International Financial Futures Exchange, LIFFE, and qualified as a pit trader in equity and equity index options. In 1996, Abdulla became a trainer for regulatory qualifications and then for non-exam courses, primarily covering all major financial products.

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