Question
1. (6) Let a hypothetical month have exactly four weeks. Assume an investment of 100 is made at the beginning of week one and
1. (6) Let a hypothetical month have exactly four weeks. Assume an investment of 100 is made at the beginning of week one and it has the following end of week values: W1 = 100.75; W2 = 101; W3 = 100.95; and W4 = 101.05 a) Calculate the weekly arithmetic returns. What is the 1-month return with weekly compounding and, alternatively, with monthly compounding? b) Calculate the weekly logarithmic returns. As in a), what is the 1-month return with weekly compounding and, alternatively, with monthly compounding? How do the calculation methods in a) and b) differ?
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Accounting What the Numbers Mean
Authors: David H. Marshall, Wayne W. McManus, Daniel F. Viele,
9th Edition
978-0-07-76261, 0-07-762611-7, 9780078025297, 978-0073527062
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