1. Today is 1 January 2018. Jackson who is aged 80 has a portfolio which consists of three different types of financial instruments (henceforth referred to as instrument A, instrument Band instrument C.

• InstrumentAis a zero-coupon bond with a face value of 100. This bond matures at par. The maturity date is 1 July 2023.

• Instrument Bis a Treasury bond with a coupon rate of j2= 3.45% p.a. and face value of 100. This bond matures at par. The maturity date is 1 July 2020.

• Instrument Cis a Treasury bond with a coupon rate ofj2= 2.85% p.a. and face value of 100. This bond matures at par. The maturity date is 1 January 2021.

  d. [8 marks] Based on your part b and part c calculation, what is Jackson’s holding period yield rate for instrument A, instrument Band instrument C? Assume the reinvestment rate isj2= 4.35% p.a. Express your answers in terms of j2 as a percentage and round your answers to one decimal place.

  Table 1: Survival probability

  Year	Probability of surviving from start of year to end of year
  1	0.75
  2	0.58
  3	0.37
  4	0.23
  5	0