In calculating the value of portfolio tomorrow, we used Vtomorrow = Vtoday x e^(r/365) = Vtoday x e^(0.06/365)
Why didn’t we use Vtomorrow = Vtoday x (1+ 0.06/365)^365
Might be silly forgotten principle
bcos it is continuous compounding…
In calculating the value of portfolio tomorrow, we used Vtomorrow = Vtoday x e^(r/365) = Vtoday x e^(0.06/365)
Why didn’t we use Vtomorrow = Vtoday x (1+ 0.06/365)^365
Might be silly forgotten principle
bcos it is continuous compounding…