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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.

  c. Jackson purchased all the instrumentAon 1 July 2013, purchased all the instrumentBon 1 January 2014 and purchased all the instrumentCon 1 July 2011.

  1. Calculate the purchase price of one instrumentA, given that the purchase yield rate isj2= 4.5% p.a. Round your answer to four decimal places.

  2. Calculate the purchase price of one instrumentB, given that the purchase yield rate isj2= 4.5% p.a. Round your answer to four decimal places.

  3. Calculate the purchase price of one instrumentC, given that the purchase yield rate isj2= 4.5% p.a. Round your answer to four decimal places.