Zero-coupon bonds or a loan paid off in one lump sum at maturity have a duration of one.

Name: Zero-coupon bonds or a loan paid off in one lump sum at maturity have a duration of one.
Brand: Quizplus
Rating: 4.9 (53 reviews)

Question

Quizplus · Accepted Answer

The duration of a zero-coupon bond is equal to its time to maturity, not one, because it involves a single payment at maturity, and duration measures the bond's sensitivity to interest rate changes, effectively its weighted average time to receive the bond's cash flows.

Zero-Coupon Bonds or a Loan Paid Off in One Lump