Need help with this bond question

[jasonou]

A 5000 serial bond with 10% annual coupons will be redeemed in five equal installments of 1100 beginning at the end of the 11-th year and continuing through the 15-th year. The bond was bought at a price P to yield 9% annual effective. Determine P.
A. 5000 B. 5227 C. 5537 D. 5764 E. 5991

Solution:C

I first discount all 5 level redemption values back to time 10 and then I want to apply the basic pricing formula
PV=Fr a angle 10 + CV^10 (I use Fr=500 and C is PV of that 5 level redemption values)
however, I got A in this calculation.

Can any body tell where do I make a mistake?
Or is it serial bond still on exam?

[Car'a'carn]

Since the coupon rate is higher than the yield the bond must be sold at a premium, so A is not the answer. I suspect that you are using wrong rate in your calc.

[Gandalf]

Search is your friend. If you search the FM forum for "serial", you may find other references.

http://www.actuarialoutpost.com/actu...ad.php?t=95188 discusses this problem

I'm not sure, but several posters have said serial bonds are no longer on FM.

[jasonou]

Thank you both, I got it. I forgot to include that decreasing coupons from year 11 to year 15