Today is 1 July 2020. Siobhn has a portfolio which consists of two different types of financial instruments (henceforth referred to as instrument A and instrument B). Siobhn purchased all instruments on 1 July 2011 to create this portfolio and this portfolio is composed of 39 units of instrument A and 42 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 = 2.74% p.a. and face value of 100. This bond matures at par. The maturity date is 1 January 2023.

Calculate the current duration of Siobhns portfolio using a yield to maturity of j₂ = 2.62% p.a. Express your answer in terms of years and round your answer to two decimal places

a.

6.55

b.

5.40

c.

5.27

d.

7.13