Herry is planning to purchase a Treasury bond with a coupon rate of 2.26% and face value of $100. The maturity date of the bond is 15 March 2033. (d) If Henry purchased this bond on 3 March 2020, what is his purchase price (rounded to four decimal places)? Assume a yield rate of 3.11% p.a. compounded half-yearly. Henry needs to pay 28.2% on coupon payment and capital gain as tax payment. Assume that all tax payments are delayed by half year. a. 66.4562 O b. 80.6126 ○ c. 81.6140 ○ d. 91.9681

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 8P
Question
Herry is planning to purchase a Treasury bond with a coupon rate of 2.26% and face value of $100. The maturity date of the bond is 15 March 2033.
(d) If Henry purchased this bond on 3 March 2020, what is his purchase price (rounded to four decimal places)? Assume a yield rate of 3.11% p.a. compounded half-yearly. Henry needs to pay 28.2% on coupon payment and
capital gain as tax payment. Assume that all tax payments are delayed by half year.
a. 66.4562
O b. 80.6126
○ c. 81.6140
○ d. 91.9681
Transcribed Image Text:Herry is planning to purchase a Treasury bond with a coupon rate of 2.26% and face value of $100. The maturity date of the bond is 15 March 2033. (d) If Henry purchased this bond on 3 March 2020, what is his purchase price (rounded to four decimal places)? Assume a yield rate of 3.11% p.a. compounded half-yearly. Henry needs to pay 28.2% on coupon payment and capital gain as tax payment. Assume that all tax payments are delayed by half year. a. 66.4562 O b. 80.6126 ○ c. 81.6140 ○ d. 91.9681
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