SOA Exam FM Sample Question 419
Study guide: Exam FM-2
A bank issues two bonds with the same annual effective yield rate. The first bond is a 10-year zero-coupon bond with a price of 3000 and a face amount of 5000. The second bond is a 15-year bond providing quarterly coupons, with a price of 1000 and a face amount of 950.
Calculate the annual coupon rate for the second bond.
- A) 5.24%
- B) 5.36%
- C) 5.58%
- D) 5.65%
- E) 5.76%
Answer this question and see the worked solution