The duration of a par-valueannual bond with a coupon rate of 7% and a remaining time to maturity of 3 years is

A) 3 years.
B) 2.71 years.
C) 2.81 years.
D) 2.91 years.

Coupon Rate

The interest rate per year on a bond, expressed as a fraction of its face value.

Par-Value

The face value of a bond or stock, representing the amount that the issuer agrees to repay at maturity or the nominal value of a share, respectively.

Duration

A measure of the sensitivity of a bond's price to changes in interest rates, essentially a weighted average of the time until cash flows are received.