Duration of a pure discount bond:
A) is equal to its half-life.
B) is less than a zero coupon bond.
C) is equal to the liabilities hedged.
D) equal to its maturity.

Name: Duration of a pure discount bond: A) is equal to its half-life. B) is less than a zero coupon bond. C) is equal to the liabilities hedged. D) equal to its maturity.
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Question

Quizplus · Accepted Answer

The duration of a pure discount bond, such as a zero-coupon bond, is equal to its time to maturity because all cash flows occur at maturity.

Duration of a Pure Discount Bond