A four-year maturity zero percent coupon corporate bond with a required rate of return of 12 percent has a duration of ________ years.

Question

asked Nov 26, 2021 95.2k views

1 Answer

Ferhatelmas · Answer 1 · 2021-12-01T07:50:09+0000

Answer: 4 years

Step-by-step explanation:

A four-year maturity zero percent coupon corporate bond with a required rate of return of 12 percent has a duration of 4 years.

The duration of a zero coupon bond is the life of the bond. In this case, the life of the bod is given in the question as 4 years.

Therefore, the answer will be 4 years.