I very much agree with Shakti (as always) but if you are more interested in math and deeper analytical challenges than what the CFA might require, you can always consider the actuarial designations. (see www.soa.org or www.casact.org - I am not sure of the applicability of these certifications...
Not exactly Jayanthi. I am preparing for the MFE actuarial exam (Models for Financial Economics) It is mostly related to pricing options and theoretical development of interest rate models.
"Question: When nominal rate is 5% compounding has to be more than 5%."
This is somewhat true but missing the mark slightly. The continuous compounded rate that would be equiavelent to a 5% nominal rate compounded monthly must be LESS than the nominal rate as the effect of compounding...
Nominal Monthly Rate (k) is 5.0%. Nominal means that you need to use the following formula to transform in into an effective annual rate (i): (1 + k/m)^(mt) = 1 + i.
Then, we use the following formula to arrive at the equivalent continuously compounded rate (d): exp^d = 1 + i which gives...
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