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Today is 1 July 2020. Joan has a portfolio which consists of two different types of financial instruments (henceforth referred to as instrument A and
Today is 1 July 2020. 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 2011 to create this portfolio and this portfolio 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. The maturity date is 1 January 2030. Instrument B is a Treasury bond with a coupon rate of j2 = 2.16% p.a. and face value of 100. This bond matures at par. The maturity date is 1 January 2023. (b) Calculate the current price of instrument B per $100 face value. Round your answer to four decimal places. Assume the yield rate is j2 = 4.03% p.a. and Joan has just received the coupon payment. Select one: a. 82.9248 b. 95.5948 c. 96.6748 O d. 94.7653
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