SOA Exam FM Sample Question 234
Study guide: Exam FM-2
A bank issues two 20-year par-value bonds providing annual coupons. Each bond sells for the same price and provides an annual effective yield rate of 6.5%.
The first bond has a redemption value of 6000 and a coupon of 7.6% paid annually. The second bond has a redemption value of 7500 and a coupon of r% paid annually.
Calculate r.
- A) 5.6
- B) 5.9
- C) 6.1
- D) 6.7
- E) 7.2
Answer this question and see the worked solution