Gerald is planning to purchase an Australian Treasury bond with a coupon rate ( j 2 )
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Question:
Gerald is planning to purchase an Australian Treasury bond with a coupon rate j of and face value of $ The maturity date of the bond is May Gerald's bond matures at par.
If Gerald purchased this bond on May what is his purchase price rounded to four decimal places Assume a yield rate of pa compounded halfyearly, allowing for taxation. Gerald needs to pay tax at rate on coupon payments. Assume the tax on coupon is paid immediately on the coupon payment date.
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