Please explain the correct answer A 10-year maturity coupon bond has a six-year duration. An equivalent 20-year bond with the same coupon has a duration: A) equal to 12 years. B) less than six years. C) less than 12 years. D) equal to six years. E) greater than 20 years

Please explain the correct answer A 10-year maturity coupon bond has a six-year duration. An equivalent 20-year bond with the same coupon has a duration: A) equal to 12 years. B) less than six years. C) less than 12 years. D) equal to six years. E) greater than 20 years

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Please explain the correct answer

A 10-year maturity coupon bond has a six-year duration. An equivalent 20-year bond with the same coupon has a duration:

A) equal to 12 years.
B) less than six years.
C) less than 12 years.
D) equal to six years.
E) greater than 20 years.

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