Municipal Bonds
Municipal bond dollar prices and accrued interest computation is on what calendar basis?
Municipal & corporate bonds = 30/360. Treasuries = Actual/Actual.
Complete Analysis & Legal Rationale
Municipal bonds use the 30/360 day count convention, meaning each month is treated as having 30 days and each year as having 360 days. This simplifies accrued interest calculations.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Matches the verified teaching point in the explanation.
30/365 is not a standard convention used in the securities industry.
Actual/360 is used for money market instruments, not municipal bonds.
Actual/365 is used for corporate bonds and Treasury securities.
Official Standard: Outline-level citation pending rule-specific upgrade. Verify against current FINRA Series 7 outline.