SOA Exam FM Sample Question 140

Study guide: Exam FM-2

You are given the following information about a 20-year bond with face amount 1000:

• i) The bond has an annual coupon rate of r payable semiannually and is redeemable at par.
• ii) The nominal annual yield rate convertible semiannually is 7.2%.
• iii) The amount for accumulation of discount in the seventh coupon payment is 4.36.

Calculate r.

• A) 2.1%
• B) 4.0%
• C) 4.3%
• D) 6.0%
• E) 6.9%

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

More questions from this set

• SOA Exam FM Sample Question 139
• SOA Exam FM Sample Question 141