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Today is 1 July, 2019. Katrina has a portfolio which consists of two different types of financial instruments (henceforth referred to as instrument A and
Today is 1 July, 2019. Katrina has a portfolio which consists of two different types of financial instruments (henceforth referred to as instrument A and instrument B ). Katrina purchased all instruments on 1 July 2011 to create this portfolio, which is composed of 28 units of instrument A and 44 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=2.16% p.a. and a face value of $100. This bond matures at par. Its maturity date is 1 January 2022. Calculate the current price of instrument A per $100 face value. Round your answer to four decimal places. Assume the yield rate is j2=4.03% p.a. a. $47.2049 b. $48.7635 c. $49.7461 d. $68.4516
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