Which of the Following Bonds Has the Longest Duration

question 50

Multiple Choice

Which of the following bonds has the longest duration?

• A) An 8-year maturity, 0% coupon bond
• B) An 8-year maturity, 5% coupon bond
• C) A 10-year maturity, 5% coupon bond
• D) A 10-year maturity, 0% coupon bond
• E) Cannot tell from the information given

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Definitions:

Raw Materials

Basic substances in their natural, modified, or semi-processed states used as inputs for manufacturing finished goods.

Labour

The effort exerted by humans, encompassing both physical and mental activities, in the creation of goods and services.

Cost Structure

The composition of a company's costs, including fixed and variable costs, that determines how it spends money on its operations.

Minimum Quantities

The smallest amount or number of items that must be purchased, produced, or kept in inventory.