A 90-day bill was purchased at a price of $98 520 and sold 30 days later at a price of $99 882.Given this information,calculate the continuously compounding holding period rate of return over the 30-day period.

Question

Quizplus · Accepted Answer

We are given the prices for the bill at the date of purchase and sale.To obtain the continuously compounded return,we simply take the natural log of the price relative.This provides us with a return of ln(99882/98520)= 0.0137 = 1.37%.

A 90-Day Bill Was Purchased at a Price of $98 1.25% 1.25 \% 1.25%

A 90-Day Bill Was Purchased at a Price of $98 $1.25 \%$