Is there any way you guys remember when to use what?
for floating calculations we use 90/360
but calc number of future contracts we use ^0.25 for example
Is there any way you guys remember when to use what?
for floating calculations we use 90/360
but calc number of future contracts we use ^0.25 for example
Floating rates are often based on LIBOR, which is a nominal interest rate; that’s why you multiply by 90/360.
If the interest rate is effective, then you use an exponent.
Thanks a lot!
Thanks Magician for helping us out despite your busy grading schedule!