The duration of any security with interim cash flows will be less than the security's maturity.

Name: The duration of any security with interim cash flows will be less than the security's maturity.
Brand: Quizplus
Rating: 4.9 (37 reviews)

Question

Quizplus · Accepted Answer

This is true as the duration of a security takes into account the timing and amount of all future cash flows, thereby reflecting the security's interest rate risk. As cash flows are received earlier for a security with interim cash flows, the duration is reduced, resulting in a shorter maturity equivalent.

The Duration of Any Security with Interim Cash Flows Will