Which one of the following is correct when computing the price of a debt security when using a discount yield?
A)The price will exceed the face value.
B)An increase in the discount yield will increase the current price.
C)The current price will decrease as the days to maturity decrease.
D)The computation will be based on a 360-day year.
E)The computation will consider leap years.

Question

Quizplus · Accepted Answer

Discount yield is typically calculated based on a 360-day year, which is a common convention in finance for simplifying interest calculations.

Which One of the Following Is Correct When Computing the Price