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According to Bloomberg, Euribor 3 months (and more precisely Euribor 3m ACT/360) is the benchmark rate in the large euro money market. It is said that "Euribor is quoted on an actual/360 day-count convention". I am not sure to understand. Does it means that it is an annualised rate or that it is a daily rate or again that it is the rate that applied to the nominal will give me the real amount of interests for three months ?

Thank your for your help !

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Euribor figures are usually presented annualized for the sake of clarity and comparability with other rates. The convention is used to clarify how you should compound: act/360 day-count convention, which means that each month is treated normally and the year is assumed to be 360 days. I suggest this link for details: https://www.emmi-benchmarks.eu/assets/files/Euribor%20FAQs%20Final.pdf

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  • $\begingroup$ Anecdote: a friend of mine said: "In Turkey the overnight interest rate is 20%! ( tradingeconomics.com/turkey/lending-rate )How do I invest so I can make 20% each and every day!". We laughed. All rates (including overnight, 3 months etc.) are always quoted in annualized terms, so 20% a year means about 0.55 basis points per day. A very good rate but it is not going to make you quickly wealthy ... $\endgroup$ – Alex C Aug 30 '18 at 14:49
  • $\begingroup$ Yes @Alex C 20% daily rate would make everyone rich.. some months ago I saw on quora a post “I have an algo giving 14% return every day”, followed by a string of disappointed users saying everything about that guy and his scam post.. madness.. $\endgroup$ – Fr1 Aug 30 '18 at 14:59

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