After a bunch of reading, I am now confused how many days a year, 360 or 365, is included when we are doing the computing ? any ideas?

It varies no standard as such but for BDY and MMY it’s definitely 360.

Also, effective annual = 365 trade discount = 365 Those 4 are always the same. You may come across different day count conventions in swaps. In those cases, the question will explicitly tell you which one to use.

AndyNZ Wrote: ------------------------------------------------------- > Also, > > effective annual = 365 > trade discount = 365 > > Those 4 are always the same. > > You may come across different day count > conventions in swaps. In those cases, the question > will explicitly tell you which one to use. Trade discount if you are going to calculate using the formula. Yes, that’s true, it accounts for 365 days. But, in case of EAY, say 90 day HPY is given which is considered as 3 month HPY. Now, you calculate the EAY(without using the formula), compounding four times for four periods, I don’t think this is 365 days. On the other hand, other yields calculated from this will be impacted as well. I am not sure if we are supposed to use HPY in days always before calculating EAY. What if exact number of days are not given in the example?