Relation between compounding frequency and day count conventions??

[shivanin]

Hi David,

Generally when we use different compounding frequencies what day counting convention is used there? ( I.e. when we just say talk about compounding and not day count conventions)..... And in T- bills , Eurodollar etc... Where different day count convention are used... We say for example...6% continuous with actual/360.

What is the difference between the two???

 

[Nicole Seaman]

Hi David,

Generally when we use different compounding frequencies what day counting convention is used there? ( I.e. when we just say talk about compounding and not day count conventions)..... And in T- bills , Eurodollar etc... Where different day count convention are used... We say for example...6% continuous with actual/360.

What is the difference between the two???

Hello @shivanin

There are many threads in the forum that discuss day count conventions. I found these threads quickly using the search function in the forum:

• https://forum.bionicturtle.com/threads/hull-chapter-6-us-treasury-bonds-day-count.10254/#post-48340
  
• https://forum.bionicturtle.com/threads/l1-t3-168-day-count-conventions-hull.4553/#post-11926
  
• https://forum.bionicturtle.com/thre...ion-and-compunding-frequency.4711/#post-12422
  
• https://forum.bionicturtle.com/thre...-bond-prices-hull-chapter-6.10628/#post-51742

We also published a new set of notes and a new instructional video recently, which also discusses day count conventions. Hopefully these resources will help to answer your questions

Nicole

 

[shivanin]

Ok... Thanks Nicole.

 

[Nicole Seaman]

Ok... Thanks Nicole.

No problem. David is leaving for vacation today, so if you are taking the exam tomorrow, I didn't want you to have to wait on an answer

Nicole

 

[shivanin]

Yaa... Thanks a lot.
Yes....Exam tomorrow......

 

[Nicole Seaman]

Good luck tomorrow!!