You are calculating the bank discount yield of a bond on March 15, 2008. 2008 is a leap year. You would use __________ days in the calculation.
A) 360
B) 365
C) 366
D) 365 or 366
E) Insufficient information.

Question

Quizplus · Accepted Answer

Bank discount yield is calculated on the basis of a 360-day year. However, in a leap year, the actual number of days may be 365 or 366. To ensure accuracy, it is advisable to use the actual number of days in a leap year, which is 366. Therefore, choice C is the best option.

You Are Calculating the Bank Discount Yield of a Bond