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Calculate the current price of instrument b

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Question - Today is 1 July 2020. Susan has a portfolio which consists of two different types of financial instruments (henceforth referred to as instrument A and instrument B). Susan purchased all instruments on 1 July 2015, this portfolio is composed of 36 units of instrument A and 25 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 = 2.97% p.a. and face value of 100. This bond matures at par. The maturity date is 1 January 2023.

Calculate the current price of instrument B per $100 face value. Round your answer to four decimal places. Assume the yield rate is j2 = 2.86% p.a. and Susan has just received her coupon payment.

Reference no: EM132968573

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