SOA Exam FM Sample Question 98
Study guide: Exam FM-2
An n-year bond with semiannual coupons has the following characteristics:
- i) The par value and redemption value are 2500;
- ii) The annual coupon rate is 7% payable semi-annually;
- iii) The annual nominal yield to maturity is 8% convertible semiannually; and
- iv) The book value immediately after the fourth coupon is 8.44 greater than the book value immediately after the third coupon.
Calculate n.
- A) 6.5
- B) 7.0
- C) 9.5
- D) 12.0
- E) 14.0
Answer this question and see the worked solution
Concepts tested
- Bond Amortization
- Accumulation of Discount
- Bonds
- Book Value
- Interest
- Face Value
- Coupon
- Coupon Rate
- Term of Bond