SOA Exam FM Sample Question 61
Study guide: Exam FM-2
Consider two 30-year bonds with the same purchase price. Each has an annual coupon rate of 5% paid semiannually and a par value of 1000.
The first bond has an annual nominal yield rate of 5% compounded semiannually, and a redemption value of 1200.
The second bond has an annual nominal yield rate of j compounded semiannually, and a redemption value of 800.
Calculate j.
- A) 2.20%
- B) 2.34%
- C) 3.53%
- D) 4.40%
- E) 4.69%
Answer this question and see the worked solution