Asked by
Chloe Souerdyke
on Nov 04, 2024
Verified
Which of the following bonds has the longest duration?
A) An 8-year maturity, 0% coupon bond
B) An 8-year maturity, 5% coupon bond
C) A 10-year maturity, 5% coupon bond
D) A 10-year maturity, 0% coupon bond
E) Cannot tell from the information given
Coupon Bond
A type of bond that pays the holder a fixed interest payment (coupon) at regular intervals until the bond reaches its maturity date.
Maturity
The date on which the principal amount of a bond, loan, or other financial instrument is due to be paid back to the investors.
- Highlight the variables that play a role in bond duration and their effects on the dynamics of bond price variability.
Verified Answer
DC
Learning Objectives
- Highlight the variables that play a role in bond duration and their effects on the dynamics of bond price variability.