Duration of five-year par value zero-coupon bond

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Reference no: EM132048711

Consider a security with a face value of $100 000, which is to be repaid at maturity. The security pays an annual coupon of 8% and has a maturity of three years. The current discount rate is 10%. What is the security's duration (round to two decimals)?

A. 2.78 years

B. 3 years

C. 0.36 years

D. 1.94 years

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

A. 0.50 years

B. 2 years

C. 4.40 years

D. 5 years

Reference no: EM132048711

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