SOA Exam FM Sample Question 235
Study guide: Exam FM-2
You are given the following information about Bond X and Bond Y:
i) Both bonds are 20-year bonds.
ii) Both bonds have face amount 1500.
iii) Both bonds have an annual nominal yield rate of 7% compounded semiannually.
iv) Bond X has an annual coupon rate of 10% paid semiannually and a redemption value C.
v) Bond Y has an annual coupon rate of 8% paid semiannually and a redemption value C + K.
vi) The price of Bond X exceeds the price of Bond Y by 257.18.
Calculate K.
- A) -380
- B) -88
- C) 0
- D) 235
- E) 250
Answer this question and see the worked solution