Effective Duration

Effective Duration,

Effective Duration: What is the Meaning of Effective Duration?

  1. Effective Duration means, The term accuracy is a calculation of the security term with the default option. This term measure takes into account that the expected cash flow is volatile with changes in interest rates and is therefore a risk. The effective duration can be estimated from the modified period if the security with an embedded option behaves like a security without an option.

    • The term authentication is a calculation of the term security with embedded options.
    • Cash flow in embedded option bonds is uncertain, making it difficult to determine the rate of return.
    • The effects of fluctuations in interest rates are measured by the effective use of the term cash flow.
    • An effective 1% increase in interest rates calculates the expected drop in bond prices.

Literal Meanings of Effective Duration


Meanings of Effective:
  1. One foot soldier is available for service.

  2. Get the desired result.

  3. The actual execution of the event has been explained but has not been formally recognized.

Sentences of Effective
  1. When the war broke out, it had a total of 920 soldiers

  2. Effective solutions to environmental problems

  3. The area was not under effective Dutch management until 1904

Synonyms of Effective

essential, virtual, actual, implied, potent, constructive, unacknowledged, efficacious, practical, operative, powerful, effectual, functional, tacit, successful, implicit, productive, fruitful


Meanings of Duration:
  1. When something happens.

Sentences of Duration
  1. Flight over eight hours

Synonyms of Duration

continuation, fullness, full length, time scale, span, term, perpetuation, extent, time, period, prolongation, length of time, time span, spell, stretch, continuance, length