Question

For which type of bond, duration of a bond would be

Q: Answer-For which type of bond, duration of a bond would be equal to its time to maturity

For a zero-coupon bond, the duration is equal to the time to maturity as there are no cash flows in between. Principal payment at face value or at a premium is made at maturity only.

equal to its time to maturity

A Zero-coupon bond

B Premium bond

C Bond with embedded options

D All of the above

E None of the above

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For which type of bond, duration of a bond would be

Solution