SOA Exam FM Sample Question 142
Study guide: Exam FM-2
You are given the following information about an n-year bond, where n > 10:
- i) The bond pays 8% semiannual coupons and has face amount 1000.
- ii) The bond is redeemable at par.
- iii) The bond is callable at par 5 years after issue or 10 years after issue.
- iv)
Pis the price to guarantee a yield of 6.8% convertible semiannually andQis the price to guarantee a yield of 8.8% convertible semiannually. - v)
|P - Q| = 123.36.
Calculate n.
- A) 11
- B) 15
- C) 19
- D) 22
- E) 26
Answer this question and see the worked solution
Concepts tested
- Bond Price
- Callable Bond
- Call Price
- Bonds
- Yield Rate
- Face Value
- Coupon
- Coupon Rate
- Redemption Value
- Market Value