Wan purchased a 7-year Treasury bond with a coupon rate of j₂ = 4.5% p.a. and a face value of $100 that matures at par and is subject to a 30% tax on interest and capital gain. The purchase price was $94.230.

a. Use the approximate bond yield formula to estimate the net yield rate. Give your answer in j₂ form, rounded to 3 decimal places.

b. Use linear interpolation to calculate the net yield rate. Give your answer in j₂ form, rounded to 3 decimal places. Hint: 1.9% per half year and 2% per half year are the lower bound and the upper bound for the net yield rate.

c. Recalculate the bond price if the net yield rate is j₂ = 4.3% p.a. and all tax payments (interest tax payments and capital gain tax payment) are delayed by half year. Round the result to 3 decimal places.

d. Wan decides to hold this bond to maturity. Over the seven years the before-tax reinvestment rates he earned are shown in table 1. Calculate Wan's total realised compound yield rate if he has received a tax exemption and so does not need pay the taxes for this bond. Assume that Wan purchased this bond at a yield rate of j₂ = 4.3% p.a. and the purchase price was $101.20. Give your answer in j₂ form, rounded to 2 decimal places.

Annual reinvestment rates as below:

Year 1 - Year 2	j2 = 4.3% p.a.
Year 3 - Year 7	j2 = 4.7% p.a.