SOA Exam FM Sample Question 352
Study guide: Exam FM-2
A zero-coupon bond with a face amount of 1000 sells for a price of 640 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) 780
- B) 805
- C) 830
- D) 855
- E) 880
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