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 2015 to create this portfolio and this portfolio is composed of 201 units of instrument A and 429 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 = 2.96% p.a. and face value of 100. This bond matures at par. The maturity date is 1 January 2024. (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 = 3.71% p. a. and Joan has just received the coupon payment. Question 6 a. 99.7050 b. 98.2250 c. 97.8891 d. 94.5750
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 2015 to create this portfolio and this portfolio is composed of 201 units of instrument A and 429 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 = 2.96% p.a. and face value of 100. This bond matures at par. The maturity date is 1 January 2024. (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 = 3.71% p. a. and Joan has just received the coupon payment. Question 6 a. 99.7050 b. 98.2250 c. 97.8891 d. 94.5750
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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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 2015 to create this portfolio and this portfolio is composed of
201 units of instrument A and 429 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 = 2.96% p.a. and face
value of 100. This bond matures at par. The maturity date is 1 January 2024. (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 = 3.71% p. a. and Joan has just received
the coupon payment. Question 6 a. 99.7050 b. 98.2250 c. 97.8891 d. 94.5750
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