SOA Exam FM Sample Question 41
Study guide: Exam FM-2
Toby purchased a 20-year par value bond with semiannual coupons of 40 and a redemption value of 1100. The bond can be called at 1200 on any coupon date prior to maturity, starting at the end of year 15.
Calculate the maximum price of the bond to guarantee that Toby will earn an annual nominal interest rate of at least 6% convertible semiannually.
- A) 1251
- B) 1262
- C) 1278
- D) 1286
- E) 1295
Answer this question and see the worked solution