Query in Quants

rishabhhurkat
Good Student
Posts: 24
Joined: Wed Dec 09, 2015 9:29 am

Query in Quants

Postby rishabhhurkat » Tue Dec 15, 2015 3:00 am

4.If the stock’s initial price is $30 & its year-end price is $35, then its continuously compounded annual rate of return is:
A.15.4%
B.14.5%
C.16.4%

How to get the answer in Excel??

edupristine
Finance Junkie
Posts: 722
Joined: Wed Apr 09, 2014 6:28 am

Re: Query in Quants

Postby edupristine » Tue Dec 15, 2015 6:52 am

Hi,
Formula for Continuous compounding
FV= PV * E^(RT)

35=30*E^(R*1)
35=30*E(R)
Log(35/30)= R

So in excel, you have to type =ln(35/30)
You will get answer 15.42%

rishabhhurkat
Good Student
Posts: 24
Joined: Wed Dec 09, 2015 9:29 am

Re: Query in Quants

Postby rishabhhurkat » Thu Dec 17, 2015 2:44 am

The Function is not working

Can you Send mean Extract of Excel Spreadsheet using the Function given above.....

edupristine
Finance Junkie
Posts: 722
Joined: Wed Apr 09, 2014 6:28 am

Re: Query in Quants

Postby edupristine » Thu Dec 17, 2015 7:39 am

Hi Rishabh,
Please download the attached file.
Continuous Compounding Annual rate of return.xlsx
(9.47 KiB) Downloaded 111 times

rishabhhurkat
Good Student
Posts: 24
Joined: Wed Dec 09, 2015 9:29 am

Re: Query in Quants

Postby rishabhhurkat » Fri Dec 18, 2015 7:52 am

Thank You...

edupristine
Finance Junkie
Posts: 722
Joined: Wed Apr 09, 2014 6:28 am

Re: Query in Quants

Postby edupristine » Fri Dec 18, 2015 9:55 am

Our Pleasure :)


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