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Loc is planning to purchase a Treasury bond paying a (j2) coupon rate of 7.1% p.a. The face value of the bond is $100. Its
Loc is planning to purchase a Treasury bond paying a (j2) coupon rate of 7.1% p.a. The face value of the bond is $100. Its maturity date is 15 March 2033 ; the bond matures at par. If Loc purchased this bond on 15 March 2020, what is his purchase price (rounded to four decimal places)? Assume a yield rate of 8.4% p.a., compounded halfyearly. Loc needs to pay 28.9% of coupon payments and capital gains in tax. Assume that all tax payments are delayed by a half-year. a. $74.5812 b. $71.7459 c. $67.4838 d. $93.3839
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