Duration is affected primarily by:

Name: Duration is affected primarily by:
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The three factors that determine the value of duration are the maturity of the bond, the market rate of interest, and the coupon rate. Duration is positively correlated with maturity but moves in the opposite direction of market rates of interest and coupon rates; that is, the higher the market rate of interest or the coupon rate, the lower the duration.

Duration Is Affected Primarily By