Revision as of 21:13, 19 November 2023 by Admin (Created page with "An investor buys a one-year bond with a face amount of 100 and an annual coupon rate of 6% paid semiannually. The bond is purchased at a discount of 1.50 to yield an annual nominal rateof j convertible semiannually. Calculate j. <ul class="mw-excansopts"><li>0.022</li><li>0.038</li><li>0.068</li><li>0.076</li><li>0.136</li></ul> {{soacopyright | 2023 }}")
ABy Admin
Nov 19'23
Exercise
An investor buys a one-year bond with a face amount of 100 and an annual coupon rate of 6% paid semiannually. The bond is purchased at a discount of 1.50 to yield an annual nominal rateof j convertible semiannually.
Calculate j.
- 0.022
- 0.038
- 0.068
- 0.076
- 0.136
Copyright 2023 . The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.
ABy Admin
Nov 19'23
Solution: D
[[math]]\begin{aligned} & 98.5=3 a_{2 j_{j / 2}}+100 v^2 \\ & \frac{j}{2}=0.037929 \\ & j=0.07586\end{aligned}[[/math]]
Copyright 2023 . The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.