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Giovanni is planning to purchase an Australian Treasury bond with a coupon rate (j2) of 4.76% and face value of $100. The maturity date of
Giovanni is planning to purchase an Australian Treasury bond with a coupon rate (j2) of 4.76% and face value of $100. The maturity date of the bond is 15 May 2033. Giovanni's bond matures at par. If Giovanni purchased this bond on 5 May 2018, what is his purchase price (rounded to four decimal places)? Assume a yield rate of 1.64% p.a. compounded halfyearly, allowing for taxation. Giovanni needs to pay tax at rate 23.1% on coupon payments. Assume the tax on coupon is paid immediately on the coupon payment date. a. $128.5431 b. $128.5422 c. $126.7128 d. $127.7518
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