discrete and continous rate

To give you a precise answer you will have to tell me the context. However, normally discrete is when there are a set number of possible solutions (for example, the answer has to be a whole number - 1, 2, 3 etc) Continuous is when it can be anything e.g. 1.111, 1.112 and so on. But again, to give you a perfect answer you will have to give me the whole sentence.

i read it from kaplan's textbook.the textbook said that the risk free rate of market is also known as discrete rate.and to get countinous rate..we simply press In(1+risk free rate) on the calculator to get continous rate. So im confused here why is risk free call discrete?and another example states that return on a co's asset is discrete return aso and to get continous rate,we simply press In(1+risk free rate) on the calculator to get continous rate.why do we calculate continous for?what is continous rate?

That is only relevant in option pricing. Usually when we are discounting we discount in whole years. We could discount in whole months or whole weeks or whole days. These would be discrete periods. Strictly we should perhaps discount in minutes or even in seconds - the smaller the period the more it becomes 'continuous'. However, don't worry about it. It is only relevant in option pricing and you need to be able to use the formulae on the formula sheet. The only reason Kaplan mention it is to basically explain where the formula is coming from, but you would not be asked about this bit in the exam.

ok!!thanks sir now i get a clearer picture between discrete and continous rate :D

You are welcome :-)