Quick Answer: Which Bond Has The Longest Duration?

What is the duration of a 10 year bond?

9.1 yearsThe 10 year Treasury is more sensitive to changes in interest rates than the bond funds in your portfolio.

The 10 year Treasury has a maturity of 10 years and duration of 9.1 years.

Duration is a measure of interest rate risk, which you can learn more about here..

What is the duration of zero coupon bond?

Because zero coupon bonds make no coupon payments, a zero coupon bond’s duration will be equal to its maturity. The longer a bond’s maturity, the longer its duration, because it takes more time to receive full payment.

Are zero coupon bonds risk free?

That said, zero-coupon bonds carry various types of risk. Like virtually all bonds, zero-coupon bonds are subject to interest-rate risk if you sell before maturity. If interest rates rise, the value of your zero-coupon bond on the secondary market will likely fall.

What is the difference between bond maturity and duration?

A bond’s maturity is the length of time until the principal must be paid back. So a 10-year bond will earn interest for 10 years from the date it is purchased. … A bond’s duration, on the other hand, is a more abstract concept often used to measure interest-rate sensitivity.

Does bond duration change with time?

A bond’s duration changes with time and as its price and yield change, however. … So as a bond’s price and yield change, so does its duration. For example, a bond with 10 years till maturity and a 7% coupon trading at par to yield 7% has a duration of 7.355 years.

What does the Macaulay duration tell us?

Macaulay duration is the weighted average of the time to receive the cash flows from a bond. … Macaulay duration tells the weighted average time that a bond needs to be held so that the total present value of the cash flows received is equal to the current market price paid for the bond.

How do you reduce bond duration?

Here are his top three tips to being bond-free in under 20 years:Put a little extra in every month. “The first and most obvious way to reduce your loan term is to put in extra money every month,” he says. … Use your bond as your savings account. … Make your payments earlier in the month.

Which has the longest duration?

Eon is the longest duration of geological time. Eon are recognised as, the phanerozoic eon, the proterozoic eon and the archean eon. And eon refers to a span of 1 billion years.

Is Higher bond duration better?

In general, the higher the duration, the more a bond’s price will drop as interest rates rise (and the greater the interest rate risk). As a general rule, for every 1% change in interest rates (increase or decrease), a bond’s price will change approximately 1% in the opposite direction, for every year of duration.

What is the longest duration in music?

The length of time that a note is played is called its note duration, which is determined by the type of note.The whole note has the longest note duration in modern music. … The half note has half the duration of a whole note. … Two half notes occupy the same amount of time as one whole note.More items…

What is duration to worst?

Modified Duration to Worst—Yield change calculated to the priced to worst date; generally used to reflect the behavioral characteristics of a bond as of a specific price/yield and date; consistent with industry calculations, always calculated to the priced to worst date, including all call features.