- CFA Exams
- CFA Exam: Level I 2021
- 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 |