Today is 1 July, 2019. Hélène has a portfolio which consistsof two different types of financial instruments (henceforthreferred to as instrument A and instrument B). Hélènepurchased all instruments on 1 July 2012 to create thisportfolio, which is composed of 21 units of instrument Aand 45 units of instrument B.• Instrument A is a zero-coupon bond with a face valueof $100. This bond matures at par. Its maturity date is1 January 2029.• Instrument B is a Treasury bond with a coupon rate ofj2 = 2.02% p.a. and a face value of $100. This bondmatures at par. Its maturity date is 1 January 2022.Calculate the current price of instrument B per $100 facevalue. Round your answer to four decimal places. Assumethe yield rate is j₂ = 2.8% p.a. and Hélène has just receivedher coupon payment.a. $98.1293b. $99.1393c. $92.9465O d. $97.7705

Price of a bond is the present value of the coupon payment plus the present value of the par value…

Answered: Today is 1 July, 2019. Hélène has a…

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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