SOA Exam FM Sample Question 385
Study guide: Exam FM-2
A three-year 1000 face amount bond pays coupons of X quarterly. It is bought at a price to yield an annual nominal rate of 8% convertible quarterly. If the amount of each coupon were doubled, the purchase price would have to increase by 500 for the bond to maintain the same yield rate.
Calculate X.
- A) 20
- B) 24
- C) 31
- D) 40
- E) 47
Answer this question and see the worked solution