Question: Unless noted specifically in the question, all cash borrowing and lending rates are quoted per annum with continuous compounding. If the bond face value is

Unless noted specifically in the question, all cash borrowing and lending rates are quoted per annum with continuous compounding.
If the bond face value is not given, assume that it is $100.

You have two bond coupon with the same maturity, one has a 9% coupon paid semiannually and the other a 8% coupon paid semiannually. Which one has a lower duration and why?

a) The 8% coupon bond because a smaller portion of the total cashflow will be paid quickly.

b) The 8% coupon bond because a greater portion of the total cashflow will be paid quickly.

c) The 9% coupon bond because a greater portion of the total cashflow will be paid quickly.

d) The 9% coupon bond because a smaller portion of the total cashflow will be paid quickly.

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