A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Duration
(Difference between revisions)
|
|
| Line 1: |
Line 1: |
| - | Duration is the time, measured in years, in which a [[Bond|bond]] investor will receive the [[Present Value|present value]] of future [[Interest|interest]] and [[Principal|principal]] payments. both interest and principal, from a bond. It is calculated by multiplying the present value of the principal and each [[Coupon|coupon]] by the time that will elapse before payment is made. It is also a measure of the sensitivity of a bond's price to changes in [[Interest Rate|interest rate]]s. | + | Duration is the time, measured in years, in which a [[Bond|bond]] investor will receive the [[Present Value|present value]] of future [[Interest|interest]] and [[Principal|principal]] payments. It is calculated by multiplying the present value of the principal and each [[Coupon|coupon]] by the time that will elapse before payment is made. It is also a measure of the sensitivity of a bond's price to changes in [[Interest Rate|interest rate]]s. |
| | | | |
| | See also: [[Yield to Maturity]], [[Convexity]] | | See also: [[Yield to Maturity]], [[Convexity]] |
Current revision
Duration is the time, measured in years, in which a bond investor will receive the present value of future interest and principal payments. It is calculated by multiplying the present value of the principal and each coupon by the time that will elapse before payment is made. It is also a measure of the sensitivity of a bond's price to changes in interest rates.
See also: Yield to Maturity, Convexity