Financial mathematics · bonds diagnostic PDF
Exam FM Bond Practice Workbook: 30 Fully Worked Problems
Practice bond price, yield, premium amortization, book value, callable features, and reinvestment without losing the equation-of-value structure.
One-time USD 19 purchase for a personalized PDF. The 30 original variants are also included in the complete Financial Mathematics Proof Manual; choose this focused diagnostic for curated practice and a lower entry price.
- New practice problems
- 30
- Pages
- 76
- Time limit
- 150 min
- Price
- $19
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One original Exam FM practice question with full solution
A transit note pays 60 annually. It may be redeemed for 1,050 after year 5, for 1,020 after year 10, or for 1,000 at maturity in year 15. At a required 5% annual yield, which date produces the lowest acceptable purchase price?
- Year 5
- Year 10
- Year 15
- Years 5 and 10 tie
- All dates tie
The endpoint prices are 1,082.47, 1,089.50, and 1,103.80; year 5 is smallest, choice A.
Setup
Each possible redemption creates a different complete cash-flow stream from purchase through that date.
Model
Price each stream at 5%, including all coupons up to the relevant redemption.
Compute
The three values increase from 1,082.47 to 1,089.50 to 1,103.80.
Answer
The earliest redemption limits the guaranteed price, so year 5 and choice A are correct.
Why the other choices are wrong
- B
- The year-10 price 1,089.50 exceeds the year-5 value and is not limiting.
- C
- Maturity produces the highest of the three prices.
- D
- The year-5 and year-10 values differ by about 7.02.
- E
- Different redemption amounts and horizons produce distinct prices.
Independent answer check
| Primary value | [object Object] |
|---|---|
| Primary method | Price the bond separately under every authored redemption outcome and take the minimum. |
| Independent value | [object Object] |
| Independent method | A direct cash-flow-vector calculation gives the same three endpoint prices. |
| Answer | A · agreement passed |
Contents
Inside the 76-page edition
Candidates preparing in English for the Financial Mathematics (FM) Exam
Table of contents
- 30 original bond valuation problems
- Price-yield and redemption equations
- Premium, discount, and book-value paths
- Callable bonds and reinvestment cases
- 120 wrong-choice analyses and two-path checks
What is included
30 verified original variants selected without duplication for this focused diagnostic. Official problem wording is not included.
Verification
Every included result is reproducible
Every selected problem already passed a reproducible calculation, an independent second method, and answer-letter agreement. The compiler rejects any failed check, cross-product duplicate, or official source wording.
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Questions about this edition
Are these official sample questions?
No. Every question is an independently written original variant. Official problem wording is not reproduced.
Are complete solutions included?
Yes. Every problem includes Setup, Model, Compute, and Answer steps plus a concrete explanation for each of the four incorrect choices.
How are the answers checked?
Each answer must agree under a reproducible primary calculation and a distinct independent method before the PDF can build.
Does this overlap the complete proof manual?
Yes. These 30 original variants are selected from the verified variant bank included in the Financial Mathematics Proof Manual. This edition adds a curated focused diagnostic, answer sheet, answer key, and focused purchase price.
Independent publication
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ActuaryProof is not affiliated with, endorsed by, or sponsored by the Society of Actuaries. Exam names are used solely to identify the exams for which these study materials are relevant. All problems and solutions are original works.
Financial Mathematics Bonds Practice Workbook
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76 pages · 30 new practice problems · $19