- 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

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**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 |