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For an upvote full working must be shown, and each step of the calculation must be correct. Then the final answer must be correct to the decimal place.
Today is 1 July 2021. Joan has a portfolio which consists of two different types of financial instruments (henceforth referred to as instrument A and instrument B). Joan purchased all instruments on 1 July
2016 to create this portfolio and this portfolio is composed of 344 units of instrument A and 426 units of instrument B.
Instrument A is a zero-coupon bond with a face value of 100. This bond matures at par. The maturity date is 1 January 2030.
Instrument B is a Treasury bond with a coupon rate of j2=3.26% p.a. and face value of 100. This bond matures at par. The maturity date is 1 January 2024.
(b) Calculate the current price of instrument B per $100 face value (today's value). Round your answer to four decimal places. Assume the yield rate is j2=4.19% p.a. and Joan has just received
the coupon payment.
a.99.4443
b.97.8143
c.94.0673
d.97.4037
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