Question
Your firm invested $2,500,000 in 300-day commercial paper today. At the end of the investment period (in 300 days) the firm will receive $2,600,000. a.
- Your firm invested $2,500,000 in 300-day commercial paper today. At the end of the investment period (in 300 days) the firm will receive $2,600,000.
a. What is the 300-day holding period rate of return on the investment?
b. How many 300-day periods are there in one year?
c. What is the annual percentage rate APR earned on the investment?
d. What is the effective annual rate (EAR)?
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Continuous Time Finance
Authors: Robert C. Merton
1st Edition
0631185089, 978-0631185086
