SOA Exam FM Sample Question 264
Study guide: Exam FM-2
A ten-year bond paying annual coupons of X has a face amount of 1000, a price of 450, and an annual effective yield rate of 10%.
A second ten-year bond has the same face amount and annual effective yield rate as the first bond. This second bond pays semi-annual coupons of \dfrac{X}{2}. The price of the second bond is P.
Calculate P.
- A) 439
- B) 442
- C) 452
- D) 457
- E) 461
Answer this question and see the worked solution