A measure of a bond's price sensitivity to interest rate changes.
Roughly: a bond with 5-year duration loses about 5% in price for each 1% rise in rates (and vice versa). Longer-maturity and lower-coupon bonds have higher duration. Duration is a primary risk measure for bond portfolios.
A measure of a bond's price sensitivity to interest rate changes. Roughly: a bond with 5-year duration loses about 5% in price for each 1% rise in rates (and vice versa). Longer-maturity and lower-coupon bonds have higher duration. Duration is a primary risk measure for bond portfolios.
In bonds, Duration is one of the building blocks investors use to compare opportunities and assess risk. Understanding it helps you read research notes, earnings reports, and market commentary without getting lost in jargon.
Roughly: a bond with 5-year duration loses about 5% in price for each 1% rise in rates (and vice versa). Longer-maturity and lower-coupon bonds have higher duration.
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