Question: 15. (a) What rate, when continuously compounded, will yield a 14% annual rate? (b) What is the effective annual rate when the 14% rate is

15. (a) What rate, when continuously compounded, will yield a 14% annual rate?

(b) What is the effective annual rate when the 14% rate is continuously compounded?s

(c) Consider a cash flow of $10 every period in perpetuity starting one period from now (period t=0). What would be its price under continuous compounding of a 10% annual rate

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