SOA Exam FM Sample Question 404
Study guide: Exam FM-2
The following term structure of interest rates is based on available bond market data as of 01/01/2023:
| Term to maturity (years) | Spot Rate |
|---|---|
| 1 | 3.0% |
| 2 | 3.5% |
| 3 | 4.0% |
A three-year 1000 face amount bond with an annual coupon rate of 10% paid annually is issued on 01/01/2023.
Calculate the yield to maturity for this bond.
- A) 3.82%
- B) 3.86%
- C) 3.90%
- D) 3.94%
- E) 3.98%
Answer this question and see the worked solution