Why do we convert the effective cost of capital rate to a continuously compounded rate?
Share
Please briefly explain why you feel this question should be reported.
Please briefly explain why you feel this answer should be reported.
Please briefly explain why you feel this user should be reported.
To match with icai answer..
It’s given in the hint
We like to be smart not stupid
We also know that in most cases index futures are priced using continuous compounding formula
.
All this clearly explained in class…am surprised at the doubt…
When we are doing ca , we are not expecting perfecting on the part of icai…
We are expect filthy stuff and trying to somehow put a mask to tolerate the same, infact make manure out of that filth and throw it back at icai.
.hope you got the pun
Yes sir, got the point. Only because we’ve got the hint in the question, which is why we’re converting it right?
Had it not been there, can we can simply use the effective cost of capital rate and move ahead?