Sarah just purchased a 10-year Treasury bond with a coupon rate of j2 = 3.2% p.a. and a face value of $100 that matures at par.

a. Calculate Sarah's purchase price for this bond. Assume that the yield rate is j2 = 3.4% p.a. Round the result to three decimal places.

b. Sarah decides to hold this bond to maturity. She predicts that the reinvestment rate is j2 = 3.5% Based on your result from part a, calculate Sarah's total realised compound yield rate. Give your answer in j2 form, rounded to two decimal places.

c. Assume this bond is subject to a 30% tax on interest and capital gain. Calculate Sarah's net yield to maturity by using the linear interpolation. It is also assumed that Sarah purchased this bond at a price of $97.80 and that all tax is paid immediately. Give your answer in j2 form, rounded to two decimal places. Hint: the lower bound is assumed to be 1.2% per half year and the upper bound is assumed to be 1.3% per half year.

d. Given that this bond is subject to a 30% tax on interest and capital gain. Recalculate the price Sarah should pay if the net yield rate is j2 = 2.4% p.a. and all tax payments (interest tax payments and capital gain tax payment) are delayed by a half year from when taxable cash flows occur. Round the result to three decimal places.