The computation of dollar prices and accrued interest on municipal bonds is normally on what calendar basis?

The computation of dollar prices and accrued interest on municipal bonds typically uses the 30/360 method. This method assumes that each month has 30 days and each year has 360 days. It is a standardized way to simplify interest calculations, making it easier for investors and issuers to calculate interest payments on bonds.

Using the 30/360 basis, the interest accrued is calculated by treating months uniformly, which can be particularly advantageous in bond markets. This method is commonly applied to both corporate and municipal bonds for consistency and ease of use in bond pricing and interest calculations.

By using the 30/360 method, the complexity associated with varying month lengths is eliminated, allowing for straightforward and standardized computations.