Given the Time to Maturity, the Duration of a Zero-Coupon

question 11

Multiple Choice

Given the time to maturity, the duration of a zero-coupon bond is higher when the discount rate is

• A) higher.
• B) lower.
• C) equal to the risk-free rate.
• D) The bond's duration is independent of the discount rate.
• E) None of the options are correct.

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Definitions:

Zero Lash

The condition or adjustment in a mechanical system where there is no slack or play between the parts, resulting in precise and immediate response to input.

Spur Gearsets

Gears with straight teeth mounted on parallel shafts, commonly used in transmissions to change the speed or torque of a vehicle.

Thrust Forces

Forces that generate forward movement in a machine or structure, often used in reference to propulsion systems like rockets or jet engines.

Apex

The highest point or vertex, typically used in contexts such as the apex of a curve in road racing where a vehicle crosses the inside of the turn.