What is its continuously compounded interest rate

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1. A bond pays $150 for every $100 invested. What is its continuously compounded interest rate?

2. Explain the difference between shorting in the real world, and shorting in a perfect world.

3. Confirm my claim that you can add continuously compounded interest rates. That is, a bond pays a continuously compounded interest rate of 10%. Upon maturity, the money can be reinvested at a continuously compounded interest rate of 20%. If you invest $100 today, how much money will you end up with? What is the simple and continuously compounded interest rate over the 2 periods?

Reference no: EM131234460

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