The duration of a pure discount bond is:
A)equal to its half-life.
B)less than that of a comparable coupon bond.
C)independent of the bond's maturity.
D)is equal to the bond's maturity.
E)always equal to one year.

Question

Quizplus · Accepted Answer

The duration of a pure discount bond is equal to the bond's maturity. This is because there are no coupon payments to receive during the life of the bond, so the only cash flow is the face value payment at maturity. Therefore, the duration is the same as the bond's maturity.

The Duration of a Pure Discount Bond Is