An Investor Wants to Calculate the Continuously Compounded Return for Month

question 30

Multiple Choice

An investor wants to calculate the continuously compounded return for month t for a company.If the share price of the company was $4.50 at the start of month t and $7.25 at the end of month t,then the month t continuously compounded return is:

• A) \(30.50 \%\)
• B) \(3365 \%\)
• C) \(40.00\%\)
• D)\47.69 \%\)

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Definitions:

Full Employment

Full employment refers to a situation in the economy where all available labor resources are being used in the most efficient way possible, virtually eliminating involuntary unemployment.

Inefficient Outcome

A situation where resources are not allocated in the most valuable or productive way, often resulting from market failures or externalities.

Production Possibilities Frontier

A graphical representation that shows the combination of two goods that can be produced using all resources efficiently.

Inefficient Levels

Situations where resources are not being used in the best possible way from an economic perspective, leading to potential waste or losses.