SOA Exam FM Sample Question 409
Study guide: Exam FM-2
A ten-year mortgage is to be repaid with annual level payments at the end of the year. The mortgage is paid assuming an annual effective interest rate of 6%.
Calculate the Macaulay duration of this mortgage.
- A) 4.74
- B) 5.02
- C) 7.36
- D) 10.00
- E) There is insufficient information to calculate the Macaulay duration.
Answer this question and see the worked solution