SOA Exam FM Sample Question 28
Study guide: Exam FM-2
You are given the following information with respect to a bond:
(i) par value: 1000
(ii) term to maturity: 3 years
(iii) annual coupon rate: 6% payable annually
You are also given that the one, two, and three year annual spot interest rates are 7%, 8%, and 9% respectively.
Calculate the value of the bond.
- A) 906
- B) 926
- C) 930
- D) 950
- E) 1000
Answer this question and see the worked solution