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Today is 1 July 2 0 2 1 . Joan has a portfolio which consists of two different types of financial instruments ( henceforth referred

Today is 1 July 2021. Joan has a portfolio which consists of two different types of financial instruments (henceforth referred to as instrument A and instrument B). Joan purchased all instruments on 1 July 2017 to create this portfolio and this portfolio is composed of 342 units of instrument A and 445 units of instrument B.
Instrument A is a zero-coupon bond with a face value of 100. This bond matures at par. The maturity date is 1 January 2030.
Instrument B is a Treasury bond with a coupon rate of j2=3.04% p.a. and face value of 100. This bond matures at par. The maturity date is 1 January 2024.
(a) Calculate the current price of instrument A per $100 face value (today's value). Round your answer to four decimal places. Assume the yield rate is j2=4.39% p.a.
Question 5 Answer
a.
56.8629
b.
69.1347
c.
48.1725
d.
58.1111

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