and across countries. In this section, we will introduce the day count conventions relevant to the money markets.   Day Count Basis The day count basis specifies the convention used to determine the num- ber of days in a month and in a year. According to the Securities Indus- try Association Standard Securities Calculation Methods book, Volume 2, the notation used to identify the day count basis is:1   (numberofdaysinamonth)/(numberofdaysinayear)       1See, Jan Mayle, Standard Securities Calculation Methods, Volume 2 (New York; SecuritiesIndustryAssociation,1994).   7 8 THEGLOBALMONEYMARKETS     Although there are numerous day count conventions used in the fixed-income markets around the world, there are three basic types.2All day count conventions used worldwide are variations of these three types. The first type specifies that each month has the actual number of calendar days in that month and each year has the actual number of cal- endar days in that year or in a coupon period (e.g., Actual/Actual). The second type specifies that each month has the actual number of calendar days in that month but restricts the number of days in each year to a certain number of days regardless of the actual number of days in that year (e.g., Actual/360). Finally, the third types 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 (e.g., 30/360). Below we will define and illustrate the three types of day count conventions.   Actual/Actual Treasury notes, bonds and STRIPS use an Actual/Actual (in period) day count convention. When calculating the number of days between two dates, the Actual/Actual day count convention uses the actual number of calendar days as the name implies. Lets illustrate the Actual/Actual day count convention with a 3.625% coupon, 2-year U.S. Treasury note with a maturity date of August 31, 2003. The Bloomberg Security Display (DES) screen for this security is presented in Exhibit 2.1. In the "Security Information" box on the left-hand side of the screen, we see that the day count is specified as "ACT/ACT." From the "Issuance Info" box on the right-hand side of the screen, we see that interest starts accruing on