The duration of a coupon bond
A) does not change after the bond is issued.
B) can accurately predict the price change of the bond for any interest rate change.
C) will decrease as the yield to maturity decreases.
D) all of these are true.
E) none of these are true.

Question

Quizplus · Accepted Answer

The duration of a coupon bond changes over time as it approaches maturity and as interest rates change. It does not accurately predict price changes for large interest rate changes, and it typically increases as the yield to maturity decreases.

The Duration of a Coupon Bond