Calculate Zero Coupon Bond Duration
Introduction & Importance
Zero coupon bonds are a type of debt obligation that does not pay interest. Instead, they are sold at a discount to their face value and appreciate over time until they reach their face value at maturity. Calculating the duration of a zero coupon bond is crucial for investors to manage their portfolios and understand the bond’s sensitivity to interest rate changes.
For more information on zero coupon bonds, refer to the U.S. Department of the Treasury and the Investopedia.