Information on two portfolios

Assignment Help Financial Management
Reference no: EM131912564

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

Questions Cloud

Milliliters of barium hydroxide : How many milliliters of barium hydroxide must be added to reach a pH of 9.042?
Effect of vibration on the molecule : What is the effect of each vibration on the molecule: stretching, bending, or breaking?
Prepare irwin journal entries : The appropriate rate of interest is 11%, and the truck has a useful life of 5 years with no salvage value. Prepare Irwin's 2012 journal entries
Specific heat and heat transfer : On specific heat and heat transfer, how does the water help us to disperse heat and regulate our body temperatures?
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.
Compute the amount of software cost amortization : Karen Austin Corporation has capitalized software costs of $897,500, Compute the amount of software cost amortization for the first year
What is the maximum additional amount company will borrow : What is the maximum additional amount Company will be able to borrow after the common stock is issued
List the symbols of all inert gases : List the symbols of all inert gases. To which group of the periodic table do exceptionally inert gases belong? Why are they inert?
What are tie ratio and return on invested capital : its average tax rate is 30%, and its profit margin is 3%. What are its TIE ratio and its return on invested capital (ROIC)?

Reviews

Write a Review

Financial Management Questions & Answers

  What is the geometric return-arithmetic return for the stock

What is the geometric return for the stock? What is the arithmetic return for the stock?

  How much can you deduct from your regular income

how much can you deduct from your regular income when you file your taxes for 2016 income?

  Comprehensive recent financial analysis

Relating to revenue outlook - analysis of their goals, strategies, markets, competitive technology, regulatory and operating characteristics.

  What portion of the capital budget will be funded with debt

Betsy’s Fashions is forecasting EPS of $5.00 this year on its 5 million shares of stock outstanding. what portion of the capital budget will be funded with debt

  Return of combined stock and stock index futures contract

what is the return of the combined stock and stock index futures contract?

  Calculate expected return of investing

Suppose the market risk premium is 4 % and the? risk-free interest rate is 6 %. calculate the expected return of investing in

  How much does the required return on riskier stock exceed

By how much does the required return on the riskier stock exceed the required return on the less risky stock?

  The period assuming the entity is a partnership

Determine Mira and Lemma's basis at the end of the period assuming the entity is a partnership, a C corporation, or an S corporation.

  Fundamentally different versus goods and services marketing

Some services marketers strongly maintain that service marketing is fundamentally different from goods marketing and that different skills are involved. Some traditional goods marketers disagree, saying, “good marketing is good marketing.” Take a pos..

  Kate calculates that her marginal tax rate

Based on the IRS table, Kate calculates that her marginal tax rate is ________ when her annual taxable income is $250,000.

  The firm present shareholders have lost money in the past

The firm’s present shareholders have lost money in the past? Does it indicate that they are likely to lose money in the future?

  What kind of operations were outsources

Examples of companies that have outsourced. What kind of operations were outsources? To what countries; Motive of outsourcing operations. What was the impacton employees?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd