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How one adjusts the [[calculation period]] for a given [[interest period]] to account for the fact that it ends on a non-working day, and that therefore the interest payment can’t be made on schedule. | How one adjusts the [[calculation period]] for a given [[interest period]] to account for the fact that it ends on a non-working day, and that therefore the interest payment can’t be made on schedule. | ||
There are two things you might wish to adjust here: one is '''settlement date for the interest ''payment''''' — that is, ''the day on which the interest payment is actually made'', the other is the '''duration of the [[interest period|interest ''period'']]''' — that is ''the day on which the [[interest period]] in question is [[deemed]] to end<ref>Which, to state the bleeding obvious, is also the date by reference to which the next period starts.</ref>'' | There are two things you might wish to adjust here: one is '''settlement date for the interest ''payment''''' — that is, ''the day on which the interest payment is actually made'', the other is the '''duration of the [[interest period|interest ''period'']]''' — that is ''the day on which the [[interest period]] in question is [[deemed]] to end.<ref>Which, to state the bleeding obvious, is also the date by reference to which the next period starts.</ref>'' | ||
Unlike [[day count fraction]]s, [[business day convention|business day conventions]] are not applied in a standardised way across the industry: they are not tied to specific currencies or anything like that: it comes down to the basic preference of the institution calculating the [[interest rate]]. | Unlike [[day count fraction]]s, [[business day convention|business day conventions]] are not applied in a standardised way across the industry: they are not tied to specific currencies or anything like that: it comes down to the basic preference of the institution calculating the [[interest rate]]. |