Revision as of 22:06, 19 November 2023 by Admin (Created page with "A 1000 par value ten-year bond with 7.6% semiannual coupons is bought to yield 6.0% convertible semiannually. Calculate the book value of the bond at the end of year six immediately after the coupon payment. <ul class="mw-excansopts"><li>1054</li><li>1056</li><li>1059</li><li>1062</li><li>1065</li></ul> {{soacopyright | 2023 }}")
Nov 19'23
Exercise
A 1000 par value ten-year bond with 7.6% semiannual coupons is bought to yield 6.0% convertible semiannually.
Calculate the book value of the bond at the end of year six immediately after the coupon payment.
- 1054
- 1056
- 1059
- 1062
- 1065
Copyright 2023 . The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.
Nov 19'23
Solution: B
[[math]]
BV_{12} = 38a_{\overline{8}|0.03} 1000v^8 = 1056.16.
[[/math]]
Copyright 2023 . The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.