Question: (SOA Problem 166) Bond X is a 20-year bond with annual coupons and the following characteristics: i) Par value is 1000. ii) The annual coupon

(SOA Problem 166) Bond X is a 20-year bond with annual

(SOA Problem 166) Bond X is a 20-year bond with annual coupons and the following characteristics: i) Par value is 1000. ii) The annual coupon rate is 10%. iii) Bond X is callable at par on any of the last five coupon dates. Calculate the maximum purchase price for Bond X that will guarantee an annual effective yield rate of at least 5%. (A) 1519 (B) 1542 (C) 1570 (D) 1596 (E) 1623

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