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Today is 1 July 2019. Jenny has a portfolio which consists of three different types of financial instruments (henceforth referred to as instrument A, instru-

Today is 1 July 2019. Jenny has a portfolio which consists of three different types of financial instruments (henceforth referred to as instrument A, instru- ment B and instrument C. Jenny purchased all instruments on 1 July 2017 to create this portfolio and this portfolio is composed of 50 units of instrumentA, 78 units of instrument B and 105 units of instrument C

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 = 3.08% p.a. and face value of 100. This bond matures at par. The maturity date is 1 January 2021.

Instrument C is a Treasury bond with a coupon rate of j2 = 3.12% p.a. and face value of 100. This bond matures at par. The maturity date is 1 April 2022.

i. [2 marks] Calculate the current price of instrument A per $100 face value. Round your answer to four decimal places. Assume the yield rate isj2 = 3.3% p.a.

ii. [2 marks] Calculate the current price of instrument B per $100 face value. Round your answer to four decimal places. Assume the yield rate isj2 = 3.3% p.a. and Jenny has just received the coupon payment.

iii. [4 marks] Calculate the current price of instrument C per $100 face value by using the RBA method. Round your answer to four decimal places. Assume the yield rate is j2 = 3.3% p.a.

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