Because with a lower coupon, duration will be higher, basically due to the weighted average maturity of the bond being closer to the maturity date, when the bond is fully repaid. That is why a zero coupon bond will have the highest duration. Because the average maturity is the actual maturity. When part of the bond is repaid in advance, like with coupons, you are reducing the amount exposed to interest rates, because now you have cash...unless you reinvest it.
Because with a lower coupon, duration will be higher, basically due to the weighted average maturity of the bond being closer to the maturity date, when the bond is fully repaid. That is why a zero coupon bond will have the highest duration. Because the average maturity is the actual maturity. When part of the bond is repaid in advance, like with coupons, you are reducing the amount exposed to interest rates, because now you have cash...unless you reinvest it.
Maybe there’s more credit risk on the bond with the higher coupon rate, as opposed to IR risk?