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Question 4: Which of the following statements is true?
A. Discrete and continuous compounding produce the same results if the discount rate is positive.
B. Continuous compounding is the better method because it results in higher present values compared to
discrete compounding.
C. Continuous compounding can be thought as making the compounding period infinitesimally small.
D. The constant plays an important role in the mathematical description of continuous compounding.
Correct Answer: C

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Exam Prep PRMIA PRM 8002 : PRM Certification - Exam II: Mathematical Foundations of Risk Measurement

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