Question
Which of the following day-count convention is used to
price bond market financial instruments in Indian bond market?Solution
Day count convention followed in Indian debt market o Money market: actual/365 i.e. that the actual number of days in a month is taken for number of days (numerator) whereas the number of days in a year is taken as 365 days; o Bond market: 30/360, which means that irrespective of the actual number of days in a month, the number of days in a month is taken as 30 and the number of days in a year is taken as 360
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Match List-I with List-II and select the correct answer with the help of the codes given below the lists:
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