SIE practice questionmediumDuration
Which bond would have the highest duration?
- AA 30-year zero-coupon bond✓ Correct answer
- BA 10-year coupon bond
- CA 30-year bond with an annual coupon
- DA 5-year Treasury note
Explanation
Why A — A 30-year zero-coupon bond
Zero-coupon bonds have higher duration than coupon bonds of same maturity. The longer the maturity and lower the coupon, the higher the duration.
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