CFA Practice Question

There are 206 practice questions for this study session.

CFA Practice Question

Which compounding approach will yield a higher forward price, given the same quoted interest rate, delivery period and spot price, and no carrying benefits and costs?
A. Annual compounding
B. Continuous compounding
C. They will yield the same forward price.
Explanation: The forward price is simply the spot price compounded at the interest rate. Continuous compounding will yield the higher price.

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