Question: Computing returns. On August 7, 2014, the S&P 500 closed at 1909.57. On August 8, 2014, the S&P closed at 1931.51. (a) Compute the percentage

Computing returns. On August 7, 2014, the S&P 500 closed at 1909.57.

On August 8, 2014, the S&P closed at 1931.51.

(a) Compute the percentage change in the S&P from August 7 to August 8—that is, the daily return as a percentage.

(b) Approximate the daily return using logs. Compare your answer with part (a).

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