mcmc

seemorr Wrote:
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> The reason it's expressed in years is that for a zero-coupon bonds, the duration will be the
> same as the maturity in years. So a five-year zero-coupon bond will have a duration of 5.

It is true that the durations are same as the maturities in years for zero-coupon bonds and the cash flow of a zero-coupon bond with duration of 5 surely can match a liability with a horizon of 5 years.

Since bonds used in immunization are not limited to zero-coupon bonds, then why the (effective/modified) duration of a "coupon bond" can be a unit of time ? How the cash flows of a "coupon bond" with duration of 5 can match the payment of a liability with a horizon of 5 years ?