SOA Exam FM Sample Question 163
Study guide: Exam FM-2
A bank issues two 20-year bonds, A and B, each with annual coupons, an annual effective yield rate of 10%, and a face amount of 1000. The total combined price of these two bonds is 1600.
Bond B's annual coupon rate is equal to Bond A's annual coupon rate plus 1 percentage point.
Calculate the annual coupon rate of Bond A.
- A) 6.46%
- B) 7.15%
- C) 7.29%
- D) 8.02%
- E) 8.90%
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