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Basic Question 10 of 10
An investor purchases a zero-coupon bond with 10 years remaining until maturity. The yield-to-maturity of the bond is 10%. The investor's investment horizon is five years. The duration gap at the time of purchase is closest to:
B. six years
C. Not enough information
A. five years
B. six years
C. Not enough information
User Contributed Comments 2
| User | Comment |
|---|---|
| Kevdharr | Remember that duration for a zero coupon bond is equal to its YTM. |
| GBolt93 | No it's equal to its time to maturity. YTM would make absolutely no sense |
I used your notes and passed ... highly recommended!
Lauren
Learning Outcome Statements
describe the relationships among a bond's holding period return, its Macaulay duration, and the investment horizon
define, calculate, and interpret Macaulay duration
CFA® 2025 Level I Curriculum, Volume 4, Module 10.