- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 10. Interest Rate Risk and Return
- Subject 2. Macaulay Duration
CFA Practice Question
Which of the following statements about the Macaulay duration of a zero-coupon bond is true? The Macaulay duration of a zero-coupon bond ______
B. is equal to the bond's maturity in years divided by its yield-to-maturity.
C. cannot be calculated because of the lack of coupons.
A. is equal to the bond's maturity in years.
B. is equal to the bond's maturity in years divided by its yield-to-maturity.
C. cannot be calculated because of the lack of coupons.
Correct Answer: A
User Contributed Comments 6
| User | Comment |
|---|---|
| johntan1979 | To be more specific, it is actually Maturity x (1 + YTM/n) |
| Shaan23 | Now that question from the previous unit makes sense.... |
| janglejuic | to be perfectly clear, and to not create the confusion here I just really wanted to mention that this question and the answer A: is equal to the bond's maturity in years is absolutely correct. I just made you read this for no reason. |
| farhan92 | so Macaulay duration is average time to recover principal and coupon. We'd only recover it at maturity hence A is correct. |
| dbedford | If you go to investopedia and look up bond duration it has some good videos explaining this stuff |
| CFAJ | in b4 mark meldrum |