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Chlo is planning to purchase a Treasury bond paying a (j2) coupon rate of 1.06% p.a. The face value of the bond is $100. Its
Chlo is planning to purchase a Treasury bond paying a (j2) coupon rate of 1.06% p.a. The face value of the bond is $100. Its maturity date is 15 March 2033 ; the bond matures at par. If Chlo purchased this bond on 2 March 2020, what is her purchase price (rounded to four decimal places)? Assume a yield rate of 12.75% p.a., compounded halfyearly. Chlo needs to pay 19.7% of coupon payments and capital gains in tax. Assume that all tax payments are delayed by a half-year. a. $22.4904 b. $27.0822 c. $22.0888 d. $22.9369
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