Question
Tom has just invested $120 in a stock portfolio today. Q1) Tom predicts the value would go up at a continuously compounding annual rate of
Tom has just invested $120 in a stock portfolio today.
Q1) Tom predicts the value would go up at a continuously compounding annual rate of 10%. If his prediction is correct,
a)what would be the value of the portfolio be 6 months later?
b)what would be the gross rate of return be 6 months later?
Q2)Six months later, the market value of the stock portfolio has gone up to $140.
a)Find the gross rate of return over 6 months.
b)Find the 6-month effective rate of return. And if you want to annualize it, what would you do?
c)Find its continuously compounding rate of return per 6 months. And also find its continuously compounding annual rate.
Please help!!! :(((
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