Suppose you earn a 100 percent holding period return in one period and then lose 50 percent
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Suppose you earn a 100 percent holding period return in one period and then lose 50 percent in the next period. Compute your average periodic rate of return over the two periods using geometric holding period returns. Now, compute your average periodic rate of return using continuously compounded returns.
Are these rates of return equivalent?
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Related Book For
Multinational Finance Evaluating The Opportunities Costs And Risks Of Multinational Operations
ISBN: 9781119219682
6th Edition
Authors: Kirt C. Butler
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