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Continuous Compounding Interest Rate Conversion
Converts any periodically
compounded (monthly, semiannually, etc.) interest rate into the
continuously compounded rate. (The Black-Scholes formula
uses the continuously compounded interest rate as an input.)
(Values in boldface are required; others are
- PeriodicRate is
the nominal interest rate you wish to convert
is the number of annual compounding periods associated
with the PeriodicRate.
a semiannual coupon bond rate of 5% to a continuous
compounding rate, enter "=ContCompRate(5%, 2)".
Dividend yield for a security which is priced at $100
and pays quarterly dividends of $1.00 is calculated by
the formula "=ContCompRate(4%, 4)".
To install this function,
copy the entire contents of the window below into your
power4XL code module in Excel's Visual Basic editor.
For detailed instructions, see
Function Setup" page.
To copy the contents to your
clipboard, place your cursor inside the window below, then
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2006 by Fritz Dooley.
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