ACTSC231 Study Guide - Quiz Guide: Actuarial Science, 3E, Dirty Price
21 Jun 2019
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Department of statistics and actuarial science, university of waterloo. Notes: show all work, aid: soa approved calculators or faculty of math approved calculators, unless otherwise speci ed, nal answers should be given to 4 decimal places. 1: [3 marks] (mc section) each question has exactly one correct response. You will not receive partial credit for any work done. (a) [1 mark] a bond with semi-annual coupons is purchased at a premium to yield i(2) = 7%. If the rst write-down is . 50, determine the purchase price of the bond: 1271. 4286, 1142. 8571, 1014. 2857, 507. 1429, 635. 7143. The interest portion of the rst coupon payment is 0. 035 p . Since the principal portion is . 50, we must have. 40 = 0. 035 p + 4. 50 = p = 1014. 2857 (b) [1 mark] a bond with semi-annual coupons is purchased at a discount to yield i(2) = 9%.
