What Continuously Compounded Effective Rate of Interest Will Yield the Same

question 9

Multiple Choice

What continuously compounded effective rate of interest will yield the same present value of a future cash flow as an annual rate of interest of 2.25%?

• A) 2.23%
• B) 3.15%
• C) 0.95%
• D) 1.28%

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Definitions:

Foreign Objects

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Scalpel

A small and extremely sharp bladed instrument used for surgery, dissection, or art.

Doctrine of Laches

A legal principle that bars a claim due to a significant delay in seeking relief or asserting a right.

Res Ipsa Loquitur

Res Ipsa Loquitur is a legal doctrine which allows proof of negligence to be inferred from the very nature of an accident or injury, in the absence of direct evidence on how any defendant behaved.