SOA Exam FM Sample Question 430
Study guide: Exam FM-2
A zero-coupon 1000 face amount bond sells for a price of 890 and matures in n years, where n is a whole number.
A second bond has the same price, same time until maturity, and same annual effective yield. It pays annual coupons at an annual rate equal to 50% of the annual effective yield rate.
Calculate the face value of the second bond.
- A) 938
- B) 942
- C) 945
- D) 948
- E) 951
Answer this question and see the worked solution