Continously compounded six month annualized risk free rate?

[orangeyt]

US Continously compounded six month annualized risk free rate
is it the same thing as continuously compounded risk free rate? if not, how to convert?
Thanks!

 

[AFJunkie]

They would be very close but slightly off.
First is (e^(Rf*0.5))^2
The second is e^(Rf)

 

[orangeyt]

sorry but based on your calculation, they are the same…
AFJunkie Wrote:
——————————————————-
> They would be very close but slightly off.
>
> First is (e^(Rf*0.5))^2
>
> The second is e^(Rf)

 

[AFJunkie]

I know on a calculator they will show the same but if you put your decimle out far enough there will be a difference. One is annualized and one is continuous. Mathmatically i dont see how they could both be equal. For the CFA i’m sure its okay.
Sorry, getting bogged down in details! D@mn u CFA!

 

[TA05]

x^a*x^b=x^(a+b) –> 2^3*2^2=8*4=32=2^5
Similarly, (e^ax)^2 = e^ax*e^ax = e^(2ax)
Thus, the 6 month continuously compounded annualized rate = the continuously compounded annualized rate.