SOA Exam FM Sample Question 18
Study guide: Exam FM-2
You have decided to invest in Bond X, an n-year bond with semi-annual coupons and the following characteristics:
(i) Par value is 1000.
(ii) The ratio of the semi-annual coupon rate, r, to the desired semi-annual yield rate, i, is 1.03125.
(iii) The present value of the redemption value is 381.50.
Given (1 + i)^{-n} = 0.5889, calculate the price of Bond X.
- A) 1019
- B) 1029
- C) 1050
- D) 1055
- E) 1072
Answer this question and see the worked solution