is apparent when we want to compare, say, the yield on 26-week Treasury bill with a coupon Treasury which has six months remaining to maturity. U.S. Treasury bills, like many money market instruments, are discount instruments. As such, their yields are quoted on a bank discount basis which determine the bills price (which we explain in detail in Chapter 3). The quoted yield on a bank discount basis for a Treasury bill is not directly comparable to the yield on a coupon Treasury using an Actual/ Actual day count for two reasons. First, the Treasury bills yield is based on a face-value investment rather than on the price. Second, the Treasury bill yield is annualized according to a 360-day year while a coupon Trea- surys yield is annualized using the actual number of days in a calendar year (365 or 366). These factors make it difficult to compare Treasury bill yields with yields on Treasury notes and bonds. We demonstrate how these yields can be adjusted to make them comparable shortly. Another variant of this second day count type is the Actual/365. Actual/ 365 specifies that each month has the same number of days as indicated by the calendar and each year is assumed to have 365 days regardless of the actual number of days in a year. Actual/365 does not consider the extra day in a leap year. This day count convention is used in the UK money markets.   30/360 The 30/360 day count is the most prominent example of the third type of day count convention which restricts both the number of days in a month and in a year to a certain number of days regardless of the actual number of days in that month/year. With the 30/360 day count all months are assumed to have 30 days and all years are assumed to have 360 days. The number of days between two dates using a 30/360 day will usually differ from the actual number of days between the two dates. To determine the number of days between two dates, we will adopt the following notation:   Y1 = year of the earlier date M1 = month of the earlier date D1 = day of the earlier date Y2 = year of the later date M2 = month of the later date D2 = day of the later date   Since the 30/360 day count assumes that all months have 30 days, some adjustments must be made for months having 31 days and Febru-     ary which has 28 days (29 days in a leap year). The following adjust- ments accomplish this task:5