Modern Finance RateContinuousFromEffective

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RateContinuousFromEffective

Returns the continuously compounded rate that gives an effective yearly return.

Syntax

RateContinuousFromEffective( effectiveAnnual )

Examples

#import "std/money"
using money

'' The continuously-compounded rate that produces a given effective
'' annual return: ln( 1 + e ).
dim as Decimal eff = DecimalParse( "0.05" ).Value( )

print RateContinuousFromEffective( eff ).Value( ).ToStringFixed( 10 )   '' 0.0487901642

'' It is always BELOW the effective rate it produces -- compounding
'' continuously needs less nominal rate to get there.
print ( RateContinuousFromEffective( eff ).Value( ) < eff )             '' true

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Library: Finance
Category: Finance
Documented under: Nothing Becomes A Keyword
Source: pkg/std/money/fincore.tiko in the tiko repository.