Duration

Duration,

Definition of Duration:

  1. Duration measures how long it takes, in years, for an investor to be repaid the bond’s price by the bond’s total cash flows. At the same time, duration is a measure of sensitivity of a bond's or fixed income portfolio's price to changes in interest rates. In general, the higher the duration, the more a bond's price will drop as interest rates rise (and the greater the interest rate risk). As a general rule, for every 1% change in interest rates (increase or decrease), a bond’s price will change approximately 1% in the opposite direction, for every year of duration. If a bond has a duration of five years and interest rates increase 1%, the bond’s price will drop by approximately 5% (1% X 5 years). Likewise, if interest rates fall by 1%, the same bond’s price will increase by about 5% (1% X 5 years).

  2. The time during which something continues.

  3. Period required to complete an activity, job, or task, usually excluding holidays and other non-working days.

  4. Period a fixed-income security (such as an interest bearing bond) will take to recover the investment (principal and interest) in present value terms. This information is usually provided by the securitys dealer or the mutual fund that invests in that security. See also Macaulay duration, and modified duration.

  5. Duration is a measure of the sensitivity of the price of a bond or other debt instrument to a change in interest rates. A bond's duration is easily confused with its term or time to maturity because they are both measured in years. However, a bond's term is a linear measure of the years until repayment of principal is due; it does not change with the interest rate environment. Duration, on the other hand is non-linear and accelerates as time to maturity lessens.

  6. Change in the price of an interest generating security (such as a bond) caused by a one-percent change in interest rates.

Synonyms of Duration

Abidingness, Age, Antiquity, Changelessness, Chronology, Constancy, Continuance, Continuation, Continuity, Defeat of time, Defiance of time, Diuturnity, Durability, Durableness, Duree, Endurance, Firmness, Fixedness, Frozenness, Hardening, Immobility, Immovability, Immovableness, Immutability, Invariability, Invariableness, Inveteracy, Lastingness, Long standing, Long-lastingness, Long-livedness, Longevity, Maintenance, Perdurability, Perennation, Period, Permanence, Permanency, Perpetualness, Perpetuity, Persistence, Persistency, Psychological time, Quiescence, Rigidity, Run, Solidity, Space, Space-time, Span, Spell, Stability, Standing, Stasis, Steadfastness, Survival, Survivance, Tense, Tenure, Term, The future, The past, The present, Tide, Time, Timebinding, Torpor, Unchangeability, Unchangingness, While, Full length, Length of time, Time, Time span, Time scale, Period, Term, Span, Spell, Stretch, Fullness, Length, Extent, Continuation, Continuance, Perpetuation, Prolongation

How to use Duration in a sentence?

  1. Duration, in general, measures a bond's or fixed income portfolio's price sensitivity to interest rate changes.
  2. A flight of over eight hours duration.
  3. I was in awe for the whole duration of the song because of how beautiful the lyrics were and how elegant the melody was.
  4. Modified duration measures the price change in a bond given a 1% change in interest rates.
  5. To find out the duration of the meeting, we took note of the time the meeting both began and ended, and calculated the total length of it.
  6. Macaulay duration estimates how many years it will take for an investor to be repaid the bond’s price by the its total cash flows, and should not be confused with its maturity.
  7. A fixed income portfolio's duration is computed as the weighted average of individual bond durations held in the portfolio.
  8. Sometimes a business may go in a slump but as long as you believe in your product you can just ride out the duration of the slump.

Meaning of Duration & Duration Definition

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Duration,

Definition of Duration:

  • Definition of Duration: Periodic bonds or other borrowing instruments are subject to change in interest rates. There is a measure of sensitivity. It is easy to confuse the term of a bond with maturity and maturity, as it is measured in both years. However, the bond period is a linear measure of years until the principal matures. Interest rates do not change with the environment. Duration, on the other hand, is asymmetrical and accelerates with a decrease in maturity.

    • The duration typically meets measures to change the price sensitivity of bonds or fixed-income securities portfolio to interest rates.
    • Macaulay's term is an estimate of how many years it will take investors to pay for the bond for its total cash flow and should not be matured.
    • The duration of a change in the price of a security after accounting for a 1% change in interest rates.
    • The fixed income portfolio period is calculated on the basis of the average weight of the duration of the individual securities held in the portfolio.

  • The definition of Duration is: Expected sensitivity in bond prices to changes in interest rates. In the long run, the greater the variability (higher risk) in terms of interest rate movements.

  • A measure of sensitivity to bond prices to change interest rates. The term of a bond fund also measures the sensitivity of all the bonds of the fund to fluctuations in interest rates. It is a widely used measure of the risk level of a bond or bond portfolio.

  • Duration means, In the case of fixed income investments, this is a measure of the sensitivity of the portfolio to changes in interest rates. In addition to the maturity of the loan, it also takes into account the payment of coupons. As a risk indicator, duration is useful for two reasons. First, it provides a way to assess the degree of relevance between an asset and a portfolio benchmark or liability. Second, the portfolio indicates volatility or risk.

Meanings of Duration

  1. When something happens.

Sentences of Duration

  1. Flight over eight hours

Synonyms of Duration

spell , tide , persistence , endurance , continuation , stretch , period , continuity , perpetuation , prolongation , term , span , extent , run , continuance

Duration,

Duration Definition:

  1. The definition of Duration is: The term is a measure of the sensitivity of a security or other instrument to a change in interest rates. It is easy to see the term of a bond with its maturity or maturity, as both are measured in years. However, the bond period is a linear measure of years until principal maturity. Interest rates do not change with the environment. On the other hand, the period is nonlinear and accelerates with a decrease in maturity.

    • The term usually assesses the sensitivity of a portfolio of bonds or fixed income securities to changes in interest rates.
    • Macaulay's tenure is an estimate of how many years it will take investors to repay the bonds for their entire cash flow and should not be calculated at maturity.
    • The revised period measures changes in securities, taking into account changes in interest rates of 1%.
    • The term of a fixed income portfolio is calculated as the average weight of the duration of the individual securities in the portfolio.

  2. Expected sensitivity of bonds to interest rate changes. The longer the period, the greater the variability (higher risk) in terms of interest rate movements.

  3. Duration definition is: A measure of the sensitivity of bonds to changes in interest rates. The term of the bond also measures the sensitivity of the bonds to the movement of interest rates. This is a widely used measure of the condition of a bond or bond portfolio.

  4. Duration can be defined as, In the case of fixed income investments, this is a measure of the sensitivity of the portfolio to changes in interest rates. It takes into account the maturity of the loan as well as the payment of the coupon. As a risk indicator, the term is useful for two reasons. First, it provides a way to estimate the degree of similarity between benchmarks or bonds in ETS and portfolio. Second, it indicates portfolio volatility or risk.

Meanings of Duration

  1. The time when something happens.

Sentences of Duration

  1. Rent a motorcycle on vacation.

Duration,

Duration means,

  • You can define Duration as, Kirsten Rohrs Schmidt is a prolific writer, author, editor and professional examiner. He has experience in finance, investment, real estate and world history. Tout au long de sa career, he created and edited content for the magazine and the websites of consummators, drafting curriculum vitae and social media content for the enterprises and creating support for universities and organizations but nonprofit. Kirsten is also the founder and director of Your Best Edit, you can find her on LinkedIn and Facebook.

    • The term measures the sensitivity of a portfolio of bonds or fixed income securities to changes in interest rates.
    • Macaulay's tenure is estimated at how many years it will take investors to repay the bonds for all their cash flows.
    • The adjusted period measures the change in and around the bond, taking into account a 1% change in interest rates.
    • The term of a fixed income portfolio is calculated as the weighted average of the duration of the individual securities in the portfolio.

  • Definition of Duration: Estimation of the sensitivity of bonds to changes in interest rates. The longer the period, the greater the variability (higher risk) in terms of interest rate movements.

  • A simple definition of Duration is: A measure of the sensitivity of bonds to changes in interest rates. The term of the bond also measures the sensitivity of the movement in the interest rates of these bonds. This is a widely used measure of the condition of a bond or bond portfolio.

  • In the case of fixed income investments, this is a measure of the sensitivity of the portfolio to changes in interest rates. It takes into account the maturity of the loan and the payment of the coupon. As a risk indicator, duration is useful for two reasons. First, it provides a way to estimate the degree of similarity between ETS and benchmarks or bonds in the portfolio. Second, it indicates volatility or risk in the portfolio.