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Use graph to compare the relationship between the simple return and the log return (continuously compounding return). In excel, use rand() generate a sequence of
Use graph to compare the relationship between the simple return and the log return (continuously compounding return).
In excel, use rand() generate a sequence of returns with values between -1 and 1. Name the column by R. Then, compute log return by the formula ln(1+Rt) and generate a sequence of log returns. Draw the two lines in one plot and compare the relationship between R and ln(1+Rt).
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