- CFA Exams
- CFA Level I Exam
- Study Session 14. Fixed Income (1)
- Reading 44. Introduction to Fixed-Income Valuation
- Subject 1. Bond Prices and the Time Value of Money
CFA Practice Question
If you invested in a security promising to pay 3.75% compounded semi-annually, what would your total value per dollar invested be after 10 years?
B. 1.44504
C. 1.44995
A. 37.5
B. 1.44504
C. 1.44995
Correct Answer: C
(1+.0375/2)20 = 1.44995
User Contributed Comments 7
User | Comment |
---|---|
gaur | n = 20, i= 3.75/2=1.875, pv = (-) 100, PMT=0, FV?? ---> 144.995 |
zzhumanov | Divide by 100 to find per dollar value |
julescruis | thanks guys good recap |
jwebbs | damn i keep forgetting its quoted as yearly so i forget to /2. |
moneyguy | Exactly like gaur, but: pv = -1 cpt FV = 1.4499 (very nice :) |
kingirm | Why pmt=0 ? |
MathLoser | EAR |