SOA Exam FM Sample Question 421
Study guide: Exam FM-2
A 15-year bond is purchased at a premium. The bond has an annual effective yield rate of 7.4% and pays semi-annual coupons.
Determine which of the following statements about this bond must be true.
- A) The face amount is greater than the purchase price.
- B) The redemption value is greater than the purchase price.
- C) The redemption value is greater than the face amount.
- D) The face amount is greater than the redemption value.
- E) The purchase price is greater than the redemption value.
Answer this question and see the worked solution