SOA Exam FM Sample Question 225
Study guide: Exam FM-2
The table below shows the cash flows for a particular investment and the prevailing spot rates.
n |
Cash flow (at end of year n) |
n-year Spot rate |
|---|---|---|
| 1 | 10 | 4.0% |
| 2 | 12 | 4.5% |
| 3 | 15 | 5.5% |
| 4 | 20 | 7.0% |
Calculate the present value of this investment at the start of year 1.
- A) 47.33
- B) 48.64
- C) 49.50
- D) 50.04
- E) 51.14
Answer this question and see the worked solution