Question 86.— What is the proper rate for a 90-day bill on London as compared with a 60-day bill, and how is it calculated ?

Answer.—The difference between a 60 and a 90-day bill should be about half the difference between a demand and a 60-day bill. The difference in each case depends chiefly on the market discount rate in London. There, are, however, minor considerations which modify the effect of the rate, as long bills sometimes command a more favourable discount rate than the shorter bills and sometimes a less favourable.

Generally speaking the difference between demand and 60-day bills is 60 days' interest at the current market rate in London, the difference in stamps also being allowed for; and between 60 and 90-day bills, 30 days' interest at the same rate.