CFA Practice Question

There are 266 practice questions for this study session.

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 ______

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
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