SOA Exam FM Sample Question 301
Study guide: Exam FM-2
A ten-year 100 face amount bond has an annual coupon rate of 8% payable semiannually. The bond is callable at the end of the 5th, 7th, and 9th years at par, immediately after the coupon payment.
Calculate the maximum price of the bond that ensures an annual effective yield of at least 6%.
- A) 108.92
- B) 111.83
- C) 114.41
- D) 115.59
- E) 116.74
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