Which of the Following Statements About the Macaulay Duration of a Zero-Coupon

question 6

Multiple Choice

Which of the following statements about the Macaulay duration of a zero-coupon bond is true? The Macaulay duration of a zero-coupon bond:

• A) Is equal to the bond's maturity in years.
• B) Is equal to one-half the bond's maturity in years.
• C) Is equal to the bond's maturity in years divided by its yield-to-maturity.
• D) Cannot be calculated because of the lack of coupons.

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Definitions:

Ordinary Holder

A term used in finance to describe a person in possession of a negotiable instrument, like a check or bond, who has certain rights to it.

HDC (Holder in Due Course)

A party that has acquired a negotiable instrument in good faith and for value, therefore enjoying certain legal protections.

Unauthorized

Actions or access that have not been approved or sanctioned by the rightful authority.

Negotiates

The process of discussing and reaching a mutual agreement between parties, often involving the terms and conditions of a contract.