Today is 1 July 2021. Joan has a portfolio that consists of two different types of financial instruments (henceforth referred to as instrument A and instrument B). Joan purchased all instruments on 1 July 2017 to create this portfolio and this portfolio is composed of 203 units of instrument A and 356 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 = 3.05% p.a. and face value of 100. This bond matures at par. The maturity date is 1 January 2024.

(a) 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 j2 = 3.74% p.a.

a.4.851, b. 2.425, c. 5.777, d. 2.888

(b) Based on the price in part a and part b, and the duration value in part c, calculate the current duration of Joans portfolio. Express your answer in terms of years and round your answer to two decimal places.

a. 4.23, b. 5.83, c. 4.39, d. 6.41