Question: Today is 1 July 2 0 2 1 . Jacob has a portfolio which consists of two different types of financial instruments ( henceforth referred

Today is 1 July 2021. Jacob has a portfolio which consists of two different types of financial instruments (henceforth referred to as instrument A and instrument B). Jacob purchased all instruments on 1 July 2016 to create this portfolio and this portfolio is composed of 272 units of instrument A and 395 units of instrument B.
Instrument A is a zero-coupon bond with a face value of 100. This bond matures at par. The maturity date is 1 January 2030.
Instrument B is a Treasury bond with a coupon rate of j2=3.29% p.a. and face value of 100. This bond matures at par. The maturity date is 1 January 2024.
(c) What is the current duration of instrument B? Express your answer in terms of years and round your answer to three decimal places. Assume the yield rate is j2=4.13% p.a.
a.
2.880
b.
2.419
c.
4.839
d.
5.759

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