Steel Pier Company has issued bonds that pay semiannually with the following characteristics:
-If the bond's coupon was smaller than 10%,the modified duration would be _____ compared to the original modified duration.

Question

Steel Pier Company has issued bonds that pay semiannually with the following characteristics: 
-If the bond's coupon was smaller than 10%,the modified duration would be _____ compared to the original modified duration.

Quizplus · Accepted Answer

A bond with a smaller coupon rate generally has a longer duration because it pays less interest over time, making it more sensitive to changes in interest rates.

Steel Pier Company Has Issued Bonds That Pay Semiannually with the Following