SOA Exam FM Sample Question 43
Study guide: Exam FM-2
Mary purchased a 10-year par value bond with an annual nominal coupon rate of 4% payable semiannually at a price of 1021.50. The bond can be called at 100 over the par value of 1100 on any coupon date starting at the end of year 5 and ending six months prior to maturity.
Calculate the minimum yield that Mary could receive, expressed as an annual nominal rate of interest convertible semiannually.
- A) 4.7%
- B) 4.9%
- C) 5.1%
- D) 5.3%
- E) 5.5%
Answer this question and see the worked solution