Stacia buys a 5 year bond with coupons at 6% convertible monthly which will be redeemed at $1,500. She buys the bond to yield 9% convertible monthly. The purchase price is $1,100.

Calculate the par value

• $2,916.84
• $1,060.67
• $2,114.52
• $376.40
• $23.04

Hardiek, Aaron (June 2010). "Study Questions for Actuarial Exam 2/FM". digitalcommons.calpoly.edu. Retrieved November 20, 2023.

Solution: D

P = 1100, i = .0075, r = .005, C = 1500

[[math]] \begin{aligned} & 1100=1500 \mathrm{v}^{60}+\mathrm{F}(.005) \mathrm{a}_{\overline{60}|.0075} \\ & 141.95=\mathrm{F}(.005) \mathrm{a}_{\overline{60}|.0075} \\ & \mathrm{~F}=376.40\end{aligned} [[/math]]

Hardiek, Aaron (June 2010). "Study Questions for Actuarial Exam 2/FM". digitalcommons.calpoly.edu. Retrieved November 20, 2023.