An security is currently valued at a price of $200 per unit, and is expected to...
An security is currently valued at a price of $200 per unit, and is expected to have a continuously compounded quarterly return of 8 %. What is the expected price at the end of the quarter? Enter price accurate to two decimal places. The number has to be 216. please show all the steps/ Thank you.
Homework Answers
Current value = $200
So as per question the interest rate given is converted in continuousl compounder quarter only i.e. 8%. Since nothing is mention after interest rate like p.a. or half yearly, we assume given interest rate is for a quarter only.
Hence,
Return = $200 + ($200×8%)
Return = $200 + ($200×0.08)
Return = $200+$16
Return = $216
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