Question: Suppose a 3-month Treasury Note has a holding period return, or r f (T), of 1.5%. What is the APR? What is the EAR? If

  1. Suppose a 3-month Treasury Note has a holding period return, or rf (T), of 1.5%.
    1. What is the APR?
    2. What is the EAR?
    3. If instead of a 3-month maturity, assume that T is now incredibly small and 1/T goes to infinity. What is EAR in this scenario?

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