Which one of these bonds has the highest duration?
A)15-year high coupon
B)15-year zero coupon
C)10-year zero coupon
D)10-year high coupon
E)15-year low coupon

Question

Quizplus · Accepted Answer

Zero coupon bonds have higher durations than coupon bonds because they have no intermediate cash flows to offset the principal repayment at maturity. Among the given options, the 15-year zero coupon bond will have the highest duration as its entire cash flow is concentrated at the end of the term.

Which One of These Bonds Has the Highest Duration