Continuously compounded rate of return and underlying stock

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1. Calculate the value of a bond that matures in 13 years and has a $1,000 par value. The annual coupon interest rate is 9 percent and the? market's required yield to maturity on a? comparable-risk bond is 11 percent. The value of the bond is

2. What is the relationship between a stock's continuously compounded rate of return and the underlying stock prices that can only be observed at finite time intervals?

3. Your opinion about the extent to which markets are efficient will have a significant impact on your choice re effective trading strategies. Briefly explain why and how this is true.

Reference no: EM131975912

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