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Calculate the current price of instrument

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Today is 1 July 2021. Sarah 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 298 units of instrument A and 475 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 = 3.38% p.a. and face value of 100. This bond matures at par. The maturity date is 1 January 2024.

Calculate the current price of instrument A per $100 face value (today's value). Round your answer to four decimal places. Assume the yield rate is j2 =3.69% p.a.

a.58.8503
b.73.2867
c.54.0099
d.57.7841

Reference no: EM133074562

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