The duration of a coupon bond is:
A)equal to its number of payments.
B)less than that of a zero coupon bond of equal maturity.
C)equal to the zero coupon bond of the same maturity.
D)equal to its maturity.
E)increases as the time to maturity decreases.

Question

Quizplus · Accepted Answer

Duration of a coupon bond is less than that of a zero coupon bond of equal maturity because the coupon payments lead to earlier cash flows, reducing the bond's duration compared to a zero coupon bond which pays all at maturity.

The Duration of a Coupon Bond Is