When reviewing the FRA chapters in CFAI book, I realize they seem to use (1+interest rate) ^ 270/360 1+ interest rate*270/360 interchangeably, without verbal indications (exponential compounding, etc) It is a small difference, but I just want to ask if any one can shed some light on this for me. Thx!
This depends on whether they use continuous interest rate or normal periodic compounding. In continuous time period compounding you use exponentials.