the difference between SOFR compounded rate vs 5 day lookback period
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SOFR lookback: If today is June 10th: my interest rate for today is based on the spot SOFR rate on June 5th (i.e., any given period’s applied interest rate is based on today minus the lookback date). Daily compounded SOFR: applies today’s spot SOFR and compounds interest at each following day’s spot SOFR rate.
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