ACTB40 Study Guide - Final Guide: University Of Toronto Scarborough, Scientific Calculator, Callable Bond
9 Jun 2019
School
Department
Course
Professor
Document Summary
Examination aids allowed: non-programmable scientific calculator, formula sheet (provided with exam paper) Instructions: there are 13 questions on 16 pages in total (including this cover sheet) for this exam, write your student number at the top of each page, answer all questions directly on the examination paper. Find the nominal annual discount rate d(12), convertible monthly, that is equivalent to a constant force of interest of t=5%. The 1-year accumulation factor using the force of interest is a (1) exp exp. 1. 051271 (alternatively, we could have used the properties of constant force of interest to find the equivalent interest rate i: 1 1. 051271 1 . 051271 ln(1 exp i i. The 1-year accumulation using the nominal annual discount rate is a (1) A perpetuity immediate with annual payments of . A 10-year geometric annuity immediate with annual payments starting at and increasing by x% each year.
