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Which of the following Treasury securities is likely to show the longest duration? A A 10-year zero coupon bond   B A 10-year 10% coupon bond   C A Disney unsecured bond             D           A very long maturity treasury bill       A lower coupon rate has what effect on the bond’s duration? A Duration is twice as long for each percent increase   B Duration is lower   C Duration stays the same   D Duration is higher

Which of the following Treasury securities is likely to show the longest duration? A A 10-year zero coupon bond   B A 10-year 10% coupon bond   C A Disney unsecured bond             D           A very long maturity treasury bill       A lower coupon rate has what effect on the bond’s duration? A Duration is twice as long for each percent increase   B Duration is lower   C Duration stays the same   D Duration is higher

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Which of the following Treasury securities is likely to show the longest duration?
  • A
    A 10-year zero coupon bond
     
  • B
    A 10-year 10% coupon bond
     
  • C
    A Disney unsecured bond
     

          D

          A very long maturity treasury bill
 
 
 
A lower coupon rate has what effect on the bond’s duration?
  • A
    Duration is twice as long for each percent increase
     
  • B
    Duration is lower
     
  • C
    Duration stays the same
     
  • D
    Duration is higher
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