Which of the following scenarios would likely indicate a significant duration?

The scenario involving a long-term bond with low coupon payments is indicative of a significant duration because duration measures the sensitivity of a bond's price to changes in interest rates, capturing the time until the bond's cash flows are received.

For a long-term bond, the cash flows are spread out over an extended period, which increases the time it takes for the bondholder to recoup their investment. When coupon payments are low, most of the bond's total cash flow is concentrated in the final principal repayment; thus, the duration is increased as the bondholder has to wait longer to receive most of their investment back.

In contrast, other scenarios present factors that would typically result in shorter durations. A bond with a short maturity and high coupon payments would return most of its value much quicker, leading to lower duration. A stock with fluctuating dividends does not offer a predictable cash flow timeline, making it difficult to measure duration in a manner consistent with fixed-income securities. Meanwhile, a treasury bond with a stable return, especially if it has a shorter maturity, is likely to have a lower duration since it provides a more immediate and predictable return scenario.

Thus, the characteristics of a long-term bond with low coupon payments contribute to a notable duration, sign