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# Thread: November Sitting Exam Question

1. ## November Sitting Exam Question

I personally did not have this question...but my friend who took the exam came across this question. I think he doesn't remember all the facts. Anyway.. here it goes:

A 1000 par callable bond has coupons of 100 (I think) and is redeemable at time t at par. The redemption value at time 1 is 1250, at time 2 it is 1150 and so on. The bond is called at time t-1. Find t.

A)5 B)10 C)15 D)20 E) not enough information

Again, this question was passed along from my friend to me... I am sure this isn't an accurate portrayal of the question.

I am curious if this question rings a bell for anyone? Did you have it? What is the precise question?

My friend picked E which is a bad choice... but was it? He was certain of two things: no interest rate given and no time (maturity) given. I think he forgot what it said exactly. Thanks for your insight.

2. Originally Posted by (/iropracy
I personally did not have this question...but my friend who took the exam came across this question. I think he doesn't remember all the facts. Anyway.. here it goes:

A 1000 par callable bond has coupons of 100 (I think) and is redeemable at time t at par. The redemption value at time 1 is 1250, at time 2 it is 1150 and so on. The bond is called at time t-1. Find t.

A)5 B)10 C)15 D)20 E) not enough information

Again, this question was passed along from my friend to me... I am sure this isn't an accurate portrayal of the question.

I am curious if this question rings a bell for anyone? Did you have it? What is the precise question?

My friend picked E which is a bad choice... but was it? He was certain of two things: no interest rate given and no time (maturity) given. I think he forgot what it said exactly. Thanks for your insight.
So is the interest rate a function of time?

3. Originally Posted by NoMoreExams
So is the interest rate a function of time?
Who knows? I don't believe him because this is very strange question. He has to be missing something.

I simply posted the problem to get the facts straight....to see if someone had this kind of question.

4. I have the same exact question as your friend's. It doesn't give the interest rate and we have to find the t. I tried to find the interest rate from the 2 callable bond but I stuck and running out of time.