There are two separate formulas. What’s the difference and when should I use one or the other?
See page 181 and 182 in the Volume 4 - Derivatives curriculum.
There are two separate formulas. What’s the difference and when should I use one or the other?
See page 181 and 182 in the Volume 4 - Derivatives curriculum.
The first formula “Annual Lease Rate” = continuous compounding
Second formula “Effective Lease Rate” = Discrete compounding