Answer: -0.0012

The continuously compounded return is calculated using the formula: $$ r_t = \ln P_t - \ln P_{t-1} $$ For time 4: $$ r_4 = \ln P_4 - \ln P_3 = \ln 103.56 - \ln 103.68 $$ Calculating the values: - \ln 103.56 ≈ 4.640 - \ln 103.68 ≈ 4.641 Therefore: $$ r_4 = 4.640 - 4.641 = -0.0012 $$ The correct answer is **D** (-0.0012), which represents the continuously compounded return from time 3 to time 4.

Author: Tanishq Prabhu