Continuously compounded annual rate

CFA Level I Quant
#1

hi,

An investment of $120,000 three months ago has increased in value to $123,000. The holding period return expressed as a continuously compounded stated annual rate is closest to:

is this LN(123,000/120,000) = Rcc for 3 months then multiply by 4 to get the annual rate?

thanks

#2

Yes, your method is correct.

You could even use your BAII to double check your final answer by setting C/Y to 525,600 or 999,999!