What is the duration of a 5-year par value zero coupon bond yielding 10 per cent annually?
A) 0.50 years
B) 2 years
C) 4.40 years
D) 5 years

Name: What is the duration of a 5-year par value zero coupon bond yielding 10 per cent annually? A) 0.50 years B) 2 years C) 4.40 years D) 5 years
Brand: Quizplus
Rating: 4.9 (30 reviews)

Question

Quizplus · Accepted Answer

The duration of a zero-coupon bond is equal to its maturity because it pays all its cash flows at maturity. Therefore, a 5-year zero-coupon bond has a duration of 5 years.

What Is the Duration of a 5-Year Par Value Zero