SOA Exam FM Sample Question 144
Study guide: Exam FM-2
An investor buys a perpetuity-immediate providing annual payments of 1, with an annual effective interest rate of i and Macaulay duration of 17.6 years.
Calculate the Macaulay duration in years using an annual effective interest rate of 2i instead of i.
- A) 8.8
- B) 9.3
- C) 9.8
- D) 34.2
- E) 35.2
Answer this question and see the worked solution