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Unformatted text preview: Problem 4.4. An investor receives 1_ Calculate the percentage re compounding, c) Monthly co (a) With annual compounding:~ or 10% per annum. (b) With semiannual compoun i.e., so that R = 0.0976. The perce he1000 (c) With monthly compounding i.e.,
( I. R 12
TPj'"Hro. so that R = 0.0957 The percentage (d) With continuous compounding the re i.e., so that R e~ = = In 1.1 = 0.0953. The percent Problem 4.5. Suppose that zero interest rates witb co 3 ...
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 Spring '08
 Matos

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