Help near continuous compounding?
I understand that it is easier to convert returns to log form which somehow make continuous compounding easier.Could someone explain this to me?
Answers: I'm not sure what you're looking for?
The formula is: Amount = Pe^(r x t)
P = Original amount
r = annual rate
t = years
If you're looking for the mathematical Proof: http://www.duke.edu/~charvey/Classes/ba3...
This doesn't individual apply to finance, but Napier's "Logarithms" is a honest read, if you're into that.
The easiest way to multiply *real* returns:
(well, if you want to calculate them more than once)
1. Get MS Excel
2. Go to Tools -> Addins and breed sure all the analysis tool pack are checked.
3. Enter all the deposits and withdrawal along with the date next to them.
4. In the finishing line put your current report value and todays date (as if you pulled out everything today)
5. contained by another cell enter =Xirr(, then give emphasis to all your transactions, next hit comma, then put emphasis on all your date, close parentheses and hit enter
Voila. Now you hold your return and can calculate it subsequent week, next month and subsequent year.
Hope that helps.
How do I get into international stock trading?
Answers: Use a broker like interactive brokers that allow you to trade in plenty of markets.
find a broker that does international trading like Interactive Brokers. You can also open a global trading account at E-Trade to trade at major international markets like the UK and Hong Kong.
What happens to a company if its stock hits zero?
Answers: Worthless stock should be treated like as a loss.
Which means you get to write it off on your Schedule D as a Capital Loss.
The company itself can stay in business until it has no money in its bank account.
Ususally BANKRUPT - EVERYBODY LOSES.
Usually
And it goes to 0 because of the financial problems, not the other way around. It could turn around and the stock would go back up.
I think the answer you are looking for as to do with our shares?
The common shareholder (you and I) are screwed is the short answer. I don't think the common shareholders have _ever_ been compensated in the history of the stock market - during a companies bankruptcy.
You will never see a stock price of zero unless the company is bankrupt and there is no chance of the stockholders seeing any future value of any sort. That is, some companies in bankruptcy still have a share price above $0.00 because there is still some hope of some sort that the stock will be worth something.
Look at the company SCOXQ.PK (SCO Group), for example. The company has announced bankruptcy proceedings, and has been delisted, but the stock still hovers around $0.10 because there is some thought that in the bankruptcy the stockholders may get some pittance of money. (At one point, in 2000, it was worth over $100.00/share.)
The stock value reflects the company's financial situation, not the other way around.
The company is bankrupt and shareholders lose while creditors strip the company of its assets.