3. Here are stock prices on 6 consecutive days: $100, $47, $88, $153, $212, $100. Note that the cumulative return over the 6 days is 0.

a. What are the arithmetic returns from the first to the second day, the second to the third, and so forth?

b. What are the continuously compounded returns from the first to the second day, the second to the third, and so forth?

c. Suppose you want to compute the cumulative return over the 6 days. Suppose you don’t know the prices, but only your answers to parts

(a) and (b). How would you compute the cumulative return (which is 0) using arithmetic returns and continuously compounded returns?