easy · Certified Financial Planner Tax Planning

The Holm family is considering investing in zero-coupon bonds for their child's college fund.

According to the investment planning math provided, what is the Macaulay Duration of a zero-coupon bond?

  1. It is exactly equal to the bond's maturity.
  2. It is calculated as maturity divided by the coupon rate.
  3. It depends on the current market interest rate.
  4. It is always less than the bond's maturity.

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