The Duration of a 20-Year Zero-Coupon Bond Is

question 64

Multiple Choice

The duration of a 20-year zero-coupon bond is

• A) equal to 20.
• B) larger than 20.
• C) smaller than 20.
• D) equal to that of a 20-year 10% coupon bond.

---

Definitions:

Unsecured Bonds

Bonds issued without collateral, relying on the issuer's creditworthiness for support.

Term Bonds

Bonds that have a set maturity date on which the principal amount will be repaid to bondholders.

Bond Indenture

A bond indenture is a legal contract specifying the terms and conditions under which a bond is issued, including interest rate, maturity date, and issuer obligations.

Trade Accounts Payable

Liabilities owed by a business to its suppliers or creditors for inventory or services received that are yet to be paid for.