April 2009 Q3iv)

Discussion in 'SP5' started by Tracy, Apr 12, 2010.

  1. Tracy

    Tracy Member

    I only have the examiner's report and I'm struggling to figure out how the notional value is calculated in part a). Can anyone help?

    Also, how are we supposed to know that the answer to 5 was to use annual effective interest rates rather than continuously compounded rates? All of the examples in the notes seem to use continuously compounded so this is what I used for this. Would I still get the marks since the question didn't specify?

    Thanks
     

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