What Is the Duration of a 5-Year Par Value Zero

question 40

Multiple Choice

What is the duration of a 5-year par value zero coupon bond yielding 10 percent annually?

• A)0.50 years.
• B)2.00 years.
• C)4.40 years.
• D)5.00 years.
• E)4.05 years.

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Definitions:

Prime Rate

The interest rate that commercial banks charge their best customers (usually large corporations) for short-term loans.