Asked by
Naomi Echeverria
on Nov 04, 2024
Verified
Which of the following bonds has the longest duration?
A) A 15-year maturity, 0% coupon bond.
B) A 15-year maturity, 9% coupon bond.
C) A 20-year maturity, 9% coupon bond.
D) A 20-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 maturity date, when the principal amount is repaid.
Maturity
The expiration date of a financial instrument, at which point the principal (and all remaining interest) is due to be paid.
- Acquire an understanding of the impact that coupon rates and the length of maturity have on the duration of bonds.
Verified Answer
GB
Learning Objectives
- Acquire an understanding of the impact that coupon rates and the length of maturity have on the duration of bonds.