Sketch the graph of the price of the bond in Exercise 2.30 as a function of the continuous compounding rate r. What is the value of this function for r = 0 ? What is the limit as r →\infty?
Sketch the graph of the price of the bond in Exercise 2.30 as a function of the continuous compounding rate r. What is the value of this function for r = 0 ? What is the limit as r →\infty?