SOA Exam FM Sample Question 399
Study guide: Exam FM-2
Jennifer paid X for a ten-year 10,000 face amount bond at issue with an annual coupon rate of 5% paid annually. She immediately reinvests the coupons at an annual effective interest rate of 8%. The annual effective yield on her investment of X is 8.5% over the ten-year period.
Calculate X.
- A) 7626
- B) 7704
- C) 7987
- D) 8068
- E) 8155
Answer this question and see the worked solution