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Question
Which one of the following statements is correct concerning Macaulay duration?A. The duration of a zero coupon bond is equal to the time to maturity.
B. Most bonds have durations in excess of 15 years.
C. The duration of a coupon bond is a linear function between the time to maturity and the duration.
D. The duration of a coupon bond is greater than that of a zero coupon bond given equal maturity dates.
E. The percentage change in a bond's price is approximately equal to the change in the yield to maturity multiplied by (-1 Macaulay duration).
Answer
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Which one of the following statements regarding an original issue $25,000 GNMA bond is correct?
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