SOA Exam FM Sample Question 158
Study guide: Exam FM-2
Two 15-year par value bonds, X and Y, each pay an annual coupon of 200 at the end of the year. The face amount of Bond X is one-half the face amount of Bond Y.
At an annual effective yield of i, the price of Bond X is 2695.39 and the price of Bond Y is 3490.78.
Calculate the coupon rate for Bond X.
- A) 6.3%
- B) 7.4%
- C) 8.8%
- D) 10.0%
- E) 11.4%
Answer this question and see the worked solution