Coupon Effect On Duration

This problem practices one of the core fixed income ideas interviewers expect candidates to understand, the relationship between cash flow timing and duration. A bond’s coupon changes how much of its value is received earlier versus later, so candidates need to think through why the timing of payments affects interest rate sensitivity and why duration is not the same as maturity. Interviewers ask this because it tests whether you understand the mechanics behind bond pricing, not just the formula, and because that logic comes up often in debt and leveraged finance discussions.