SIE practice questionhardDuration
Which bond type has the highest duration, assuming equal maturities?
- AZero-coupon bond✓ Correct answer
- BHigh-coupon corporate bond
- CTreasury bill
- DFloating rate note
Explanation
Why A — Zero-coupon bond
Zeroes have the highest duration because all payment is at maturity. High-coupon, short-term, and floating rate notes have less.
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