The duration of a zero-coupon bond, often simply referred to as "duration," is a measure of its sensitivity to changes in interest rates. Specifically, it measures the weighted average time it takes for an investor to receive the bond's cash flows, which in the case of a zero-coupon bond is a single lump-sum payment at maturity.

Since zero-coupon bonds do not make periodic interest payments like traditional bonds, their entire return is realized at the bond's maturity date. Therefore, the duration of a zero-coupon bond is equal to its time to maturity. For example, if you hold a zero-coupon bond with a 5-year maturity, the duration of that bond is 5 years.

Duration is a crucial concept for bond investors because it helps them gauge the potential price sensitivity of their bond investments to changes in interest rates. The longer the duration of a bond, the more sensitive its price is to interest rate fluctuations. This means that if interest rates rise, the price of a zero-coupon bond with a longer duration will typically fall more compared to a bond with a shorter duration.

Investors use duration as a risk management tool to assess how changes in interest rates may impact the value of their bond portfolios. By understanding the duration of their bonds, investors can make more informed decisions about their fixed-income investments and tailor their portfolios to align with their risk tolerance and investment objectives.