Narges is planning to purchase an Australian Treasury bond with a coupon rate (j₂) of 4.71% p.a. and face value of $100. The maturity date of the bond is 15 May 2033.

If Narges purchased this bond on 3 May 2018, what is her purchase price (rounded to four decimal places)? Assume a yield rate of 3.12% p.a. compounded half-yearly. Narges needs to pay 29.2% of coupon payments and capital gains in tax payments. Assume that all tax payments are paid immediately.

Question 1

a.

$103.0011

b.

$105.0407

c.

$121.1105

d.

$85.7825