Day counts

[mbbx5va2]

Hi

A question that I think has a very straightforward answer (apologies in advance) but I don't know the answer:

For question 3.11 in the pricing conventions, Discounting and Arbitrage section we have an actual / actual day count. The question refers to coupon dates in 2014. Now each year there is different number of days in February 28 or 29 and other days 30 or 31. Is it an expectation for exam to remember how many days in every single month for historic years in order to calculate the number of days between coupon dates? E.g Depending on if you assume 28 or 29 days in Feb for example one can get the accrued interest number wrong. I do not know how many days in each month for the year by memory.

Thanks

 

[Rblc]

Hello @mbbx5va2 there is no easy way to calculate the number of days between 2 date mentally. You just need to get used to it unfortunately - a bit like mental math.


However I'll give you 2 tips :
1. A leap year (29 days in february) is exactly divisible by 4 --> 2014 is not a leap year
2. You can calculate the days between 2 dates using your calculator and setting the day count convention . Please see the following youtube video.

 

[mbbx5va2]

Thanks for this!