question 26

Suppose there is a financial security that promises to give you $500 fifteen years from today. All else constant, for a given nominal interest rate, a change from monthly compounding to continuous compounding will cause the current price of this security to 1) Either increase or decrease depending on the number of years until the money is to be received. 2) Remain the same. 3) None of the answers in this list is correct. 4) Decrease. 5) Increase