When computing the bank discount yield, you would use ________ days in the year.
A) 260
B) 360
C) 365
D) 366

Question

Quizplus · Accepted Answer

The bank discount yield is calculated by dividing the discount amount by the face value of the instruments and multiplying that by the number of days in a year. The convention in the financial industry is to use a 360-day year for most instruments, except for U.S. Treasury bills, which use a 365-day year. Therefore, choice B, 360 days, is the correct answer.

When Computing the Bank Discount Yield, You Would Use ________