SOA Exam FM Sample Question 435
Study guide: Exam FM-2
A 20-year 1000 face amount bond has an annual coupon rate of 6%, payable semiannually.
The bond is callable for 1060 at the end of the 10th year and for 1030 at the end of the 15th year.
Calculate the highest price for the bond that guarantees an annual nominal yield rate of 5%, convertible semiannually.
- A) 1115
- B) 1119
- C) 1126
- D) 1135
- E) 1144
Answer this question and see the worked solution