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Quentin is planning to purchase an Australian Treasury bond with a coupon rate (j2) of 4.97% and face value of $100. The maturity date of
Quentin is planning to purchase an Australian Treasury bond with a coupon rate (j2) of 4.97% and face value of $100. The maturity date of the bond is 15 May 2033. Quentin's bond matures at par. If Quentin purchased this bond on 6 May 2018, what is his purchase price (rounded to four decimal places)? Assume a yield rate of 1.75% p.a. compounded halfyearly, allowing for taxation. Quentin needs to pay tax at rate 26.6% on coupon payments. Assume the tax on coupon is paid immediately on the coupon payment date. a. $124.8902 b. $126.7134 c. $126.7143 d. $125.9830
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