SOA Exam FM Sample Question 456
Study guide: Exam FM-2
A 20-year bond has an annual coupon rate of 3% paid semiannually. The bond is priced using an annual nominal yield rate of 2% convertible semiannually. The cumulative amount of premium amortization exceeds 50% of the premium at purchase, for the first time, immediately after the nth coupon is paid.
Calculate n.
- A) 18
- B) 19
- C) 20
- D) 21
- E) 22
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