SOA Exam FM Sample Question 449
Study guide: Exam FM-2
A 30-year 1000 face amount bond has an annual coupon rate of 7% paid semiannually for the first 15 years, and an annual coupon rate of 9% paid semiannually for the last 15 years. The bond is purchased to yield an annual nominal interest rate of 8% convertible semiannually.
At the time the 20th coupon is paid, the bond has an annual nominal yield rate of 6% convertible semiannually.
Calculate the bond's book value immediately after the 20th coupon is paid.
- A) 901
- B) 940
- C) 1018
- D) 1261
- E) 1270
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