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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 July 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 July to create this portfolio and this portfolio is
composed of units of instrument A and units of instrument
Instrument A is a zerocoupon bond with a face value of This bond matures at
par. The maturity date is January
Instrument B is a Treasury bond with a coupon rate of pa and face
value of This bond matures at par. The maturity date is January
c What is the current duration of instrument B Express your answer in terms of years
and round your answer to three decimal places. Assume the yield rate is
pa
a
b
c
d
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