What happens to bond durations when coupon

问题单项选择题

What happens to bond durations when coupon rates increase and maturities increaseAs coupon rates increase, duration: As maturities increase, duration:（）①A. decreases decreases ②B. decreases increases ③C. increases increases

A. ①

B. ②

C. ③

答案

参考答案：B

解析：

As coupon rates increase the duration on the bond will decrease because investors are receiving more cash flow sooner. As maturity increases, duration will increase because the payments are spread out over a longer period of time.