SOA Exam FM Sample Question 76
Study guide: Exam FM-2
Let S be the accumulated value of 1000 invested for two years at a nominal annual rate of discount d convertible semiannually, which is equivalent to an annual effective interest rate of i.
Let T be the accumulated value of 1000 invested for one year at a nominal annual rate of discount d convertible quarterly.
S/T = (39/38)^4
Calculate i.
- A) 10.0%
- B) 10.3%
- C) 10.8%
- D) 10.9%
- E) 11.1%
Answer this question and see the worked solution
Concepts tested
- Nominal Discount Rate
- Nominal Discount Rate Convertible m-thly
- Compound Interest
- Discount Rate
- Effective Discount Rate
- Convertible m-thly
- Discount Factor