Information on two portfolios

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You have the following information on two portfolios.

Portfolio A consists of a 1000 par-value 4-year bond with 7% annual coupons and a 5-year zero-coupon bond with a par-value of X. Both bonds redeem at par.

Portfolio B consists of a single 4-year zero-coupon bond with maturity value of 10000. All bonds yield an annual effective rate of 7%. The portfolios both have the same volatility (i.e. modified duration).

Find the X. Give your answer rounded to the nearest whole number.

Reference no: EM131912564

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