What are the new interest calculation types with the parallel interest conditions ?
You are in the process of replacing LIBOR with one of the risk-free rates (RFRs) .
What are the new interest calculation types with the parallel interest conditions ? Note: There are 2 correct answers to this question.
A . Lookback interest calculation
B . Average compound interest calculation
C . Compound interest calculation
D . Floating rate calculation
Answer: AB
Explanation:
The new interest calculation types with the parallel interest conditions that are used to replace LIBOR with one of the risk-free rates (RFRs) are lookback interest calculation and average compound interest calculation. Lookback interest calculation is a method that uses a fixed number of days as an offset between the interest period and the observation period for the RFRs. Average compound interest calculation is a method that uses a compounded average of the daily RFRs over the observation period to calculate the interest amount.
Reference: https://help.sap.com/viewer/0fa84c9d9c634132b7c4abb9ffdd8f06/2020.002/en-US/3a3a8f6f7a6e4c2b8d5b8f1e2a2a0d5b.html
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