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What is his purchase price

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Question - Giuseppe is planning to purchase an Australian Treasury bond with a coupon rate (j2) of 2.57% and face value of $100. The maturity date of the bond is 15 May 2033.

If Giuseppe purchased this bond on 7 May 2018, what is his purchase price (rounded to four decimal places)? Assume a yield rate of 3.55% p.a. compounded half-yearly, allowing for taxation. Giuseppe needs to pay tax at rate 24.1% on coupon payments. Assume the tax on coupon is paid immediately on the coupon payment date.

a. 82.4344

b. 81.4598

c. 82.4354

d. 82.9057

Reference no: EM132973502

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