The duration of a par-valueannual bond with a coupon rate of 8.7% and a remaining time to maturity of 6 years is

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Quizplus · Accepted Answer

The duration of a bond is a measure of the sensitivity of its price to changes in interest rates, incorporating the present value of all future cash flows (coupon payments and the repayment of principal) weighted by the time until those cash flows occur. The given options do not provide enough information to calculate the exact duration without knowing the yield to maturity (YTM) or the discount rate used for present value calculations. The duration of a bond is typically less than its time to maturity, except for zero-coupon bonds, but the exact figure requires a specific calculation that isn't possible with the information provided.

The Duration of a Par-Valueannual Bond with a Coupon Rate