Question 1

Question 2

Siobhn is planning to purchase an Australian Treasury bond with a coupon rate (j2) of 4.22% p.a. and face value of $100. The maturity date of the bond is 15 May 2033. If Siobhan purchased this bond on 5 May 2018, what is her purchase price (rounded to four decimal places)? Assume a yield rate of 2.62% p.a. compounded halfyearly. Siobhn needs to pay 28.4% of coupon payments and capital gains in tax payments. Assume that all tax payments are paid immediately. a. $87.1821 b. $106.0380 c. $107.9066 d. $121.7279 Today is 1 July, 2019. Siobhn has a portfolio which consists of two different types of financial instruments (henceforth referred to as instrument A and instrument B). Siobhn purchased all instruments on 1 July 2010 to create this portfolio, which is composed of 24 units of instrument A and 26 units of instrument B. - Instrument A is a zero-coupon bond with a face value of $100. This bond matures at par. Its maturity date is 1 January 2029. - Instrument B is a Treasury bond with a coupon rate of j2=3.86% p.a. and a face value of $100. This bond matures at par. Its maturity date is 1 January 2022. Calculate the current duration of Siobhn's portfolio using a yield to maturity of j2=4.25% p.a. Express your answer in terms of years and round your answer to two decimal places. a. 6.18 years b. 4.80 years c. 6.83 years d. 5.13 years