How does a bonds coupon rate affect its durationthe bond prices sensitivity to interest rate changes?

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How does a bond’s coupon rate affect its duration—the bond price’s sensitivity to interest rate changes?

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Corporate Finance

ISBN: 9780132992473

3rd Edition

Authors: Jonathan Berk, Peter DeMarzo

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Question Posted: Mar 07, 2024 01:01 AM

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How does a bonds coupon rate affect its durationthe bond prices sensitivity to interest rate changes?

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A bonds coupon rate has an inverse relationship with its duration meaning higher coupon rates lead to shorter durations and vice versa Higher coupon r...View the full answer

Corporate Finance

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