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(b) Calculate the current price of instrument B per $100 face value (today's value). Round your answer to four decimal places. Assume the yield rate is j2 = 3.58% p.a. and Joan has just received the coupon payment. O a. 100.2683 O b. 98.5050 O c. 96.9506 O d. 98.7433

(b) Calculate the current price of instrument B per $100 face value (today's value). Round your answer to four decimal places. Assume the yield rate is j2 = 3.58% p.a. and Joan has just received the coupon payment. O a. 100.2683 O b. 98.5050 O c. 96.9506 O d. 98.7433

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Today is 1 July 2021. 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 2017 to create this portfolio and this portfolio is composed of 357 units of instrument A and 483 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. %3D (b) Calculate the current price of instrument B per $100 face value (today's value). Round your answer to four decimal places. Assume the yield rate is j2 = 3.58% p.a. and Joan has just received the coupon payment. a. 100.2683 b. 98.5050 c. 96.9506 O d. 98.7433
Transcribed Image Text:Today is 1 July 2021. 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 2017 to create this portfolio and this portfolio is composed of 357 units of instrument A and 483 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. %3D (b) Calculate the current price of instrument B per $100 face value (today's value). Round your answer to four decimal places. Assume the yield rate is j2 = 3.58% p.a. and Joan has just received the coupon payment. a. 100.2683 b. 98.5050 c. 96.9506 O d. 98.7433
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