SOA Exam FM Sample Question 292
Study guide: Exam FM-2
An investor purchases a 30-year bond with a face amount of 1000 and annual coupon rate of 8% paid semi-annually. The bond is callable at its face value any time following the coupon payment occurring at the end of the 15th year.
The bond is bought at a premium based on an annual effective yield rate of 7%.
Calculate the purchase price of the bond.
- A) 1067
- B) 1104
- C) 1132
- D) 1141
- E) 1154
Answer this question and see the worked solution
Concepts tested
- Bond Price
- Callable Bond
- Bonds
- Yield Rate
- Face Value
- Coupon
- Coupon Rate
- Redemption Value
- Market Value