Duration 101

While Effective Duration is a more complete measure of a bond's sensitivity to interest rate movements versus the Macauley or Modified Duration

Calculate the duration between two times · First, identify the starting and an ending time · If the times are not already in 24-hour time, convert them to 24-

duration Duration is the number of years for which the bond's sensitivity to the changes in the interest rates is measured Specifically, it measures the

duration Duration indicates the years it takes to receive a bond's true cost, weighing in the present value of all future coupon and principal payments