If the continuously compounded interest rate is a constant (r), what is the instantaneous forward interest rate
Question:
If the continuously compounded interest rate is a constant \(r\), what is the instantaneous forward interest rate (see Formula 4.5)?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 100% (2 reviews)
Instantaneous Forward Interest Rate Derivation Formula 45 given ft T fracpartial Pt Tpartial T where ...View the full answer
Answered By
Mugdha Sisodiya
My self Mugdha Sisodiya from Chhattisgarh India. I have completed my Bachelors degree in 2015 and My Master in Commerce degree in 2016. I am having expertise in Management, Cost and Finance Accounts. Further I have completed my Chartered Accountant and working as a Professional.
Since 2012 I am providing home tutions.
3.30+
2+ Reviews
10+ Question Solved
Related Book For
Mathematical Techniques In Finance An Introduction Wiley Finance
ISBN: 9781119838401
1st Edition
Authors: Amir Sadr
Question Posted:
Students also viewed these Business questions
-
KYC's stock price can go up by 15 percent every year, or down by 10 percent. Both outcomes are equally likely. The risk free rate is 5 percent, and the current stock price of KYC is 100. (a) Price a...
-
A firm has sales of $1.3 million, and 15 percent of the sales are for cash. The year-end accounts receivable balance is $150,000. What is the average collection period? (Use a 360-day year. Do not...
-
Boring Unreliable Gadget Inc.s stock price S is $50 today. It pays a dollar dividend after two months. If the continuously compounded interest rate is 4 percent per year, what is the forward price of...
-
A voltage V is applied to a dc electric motor. The armature winding resistance is equal to R. At what value of current flowing through the winding will the useful power of the motor be the highest?...
-
Approximately how many days does it take for a massive star supernova to decline to 1% of its peak brightness? a. 3 days b. 30 days c. 170 days d. 300 days 1010 10 massive star supernova -white dwarf...
-
In Exercise solve the given equations and check the results. 12 2y 2 4
-
Longer-term currency options are becoming more popular for hedging exchange rate risk. Why do you think some firms decide to hedge by using other techniques instead of purchasing long-term currency...
-
The Brugger Corp. owned a farm, operated by Jason Weimer, who acted as the companys business agent. Tri-Circle, Inc. was a farm equipment company. On behalf of Brugger, Weimer offered to buy from...
-
QUESTION 17 The following financial information on Beastie's two divisions is as follows: Upper Lower Revenues $850,000 $700,000 Operating Expenses 470,000 460,000 Operating Income $380,000 $240,000...
-
Assume the risk-free continuously compounded interest rate is \(4 \%\) per annum. For an asset with today's price \(A(0)=\$ 100\), you are told that its expected return is \(10 \%\) per annum and...
-
Let the noncompounding (simple) 3-month and 6-month interest rates be \(2 \%\) and \(3 \%\), respectively. (a) What is the \([3 \mathrm{~m}, 6 \mathrm{~m}]\) noncompounding forward rate? (b) What is...
-
Two 7070 matrices can be multiplied using 143,640 multiplications. Show how this can be used to improve the bound given by Strassen's algorithm.
-
Real estate Settlement has taken place on 12 March. You have received an order on the agent and are free to account to the Vendor for money held, and hand over the keys. The property sold for...
-
What is the role of supplementary cementitious materials (SCMs) in reducing the carbon footprint of concrete, and how do these materials affect the mechanical and durability properties of concrete...
-
Katy Perry, a health record technician, was preparing records to be filed when she found one that she thought needed the attention of the HIM director. She notices there are some suspicious sections...
-
How do you design a distributed database system capable of handling both structured and unstructured data with high availability and fault tolerance?
-
How does stress impact sleep patterns, and what advanced sleep management strategies can be used to improve sleep quality in stressed individuals ?
-
Presented below is information from the annual report of Todd Warner, Inc. Operating income ............ $850,000 Bond interest expense ........... 305,000 545,000 Income taxes .............. 218,000...
-
Tiger, Inc. signed a lease for equipment on July 1, 2007.The lease is for 10 years (the useful life of the asset).The first of 10 equal annual payments of $500,000 was made on July 1, 2007.The...
-
During the current year, Swallow Corporation, a calendar year C corporation, has the following transactions: Income from operations $660,000 Expenses from operations 720,000 Dividends received from...
-
Red Corporation and White Corporation, both calendar year C corporations, are members of a controlled group of corporations. For the current year, Red has taxable income of $130,000, and White has...
-
In the current year, Pelican, Inc., incurs $10,000 of meals and entertainment expenses that it deducts in computing net income per the corporations financial statements. All of the meals and...
-
Sandhill Company had the following transactions pertaining to debt investments. 2022 Jan. 1 Purchased 81,7 %, $1,000 Wildhorse Company bonds for $81.000 cash. Interest is payable annually on January...
-
Attempt in Progress Sunland Painting Service has budgeted the following time and material for 2022: BUDGETED COSTS FOR 2022 Time Charges Material Charges Painters' wages and benefits $41.760 Service...
-
At the beginning of 2024, Taylor Corporation had the following stockholders' equity balances in its general ledger Common Stock, $10 Par Value Paid-In Capital in Excess of Par: Common $2,500,000...
Study smarter with the SolutionInn App