SOA Exam FM Sample Question 335
Study guide: Exam FM-2
A zero-coupon bond with a face value of 1000 sells for a price of 600 and matures in n years, where n is a whole number.
A second bond has the same price, same time until maturity, and same annual effective yield. It pays annual coupons at an annual rate equal to 50% of the annual effective yield rate.
Calculate the face value of the second bond.
- A) 666.67
- B) 750.00
- C) 774.60
- D) 800.00
- E) 826.40
Answer this question and see the worked solution