Weighted Average Maturity Date

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Weighted Average Maturity Date

The average amount of time remaining before the securities in a portfolio reach maturity, weighted by the percentage of the portfolio that each security constitutes. For example, suppose a portfolio contains two bonds, one worth $10,000 and one worth $20,000, for a total of $30,000. The $10,000 bond matures in five years, and the $20,000 bond in 10 years. The weighted average remaining maturity date is calculated as:

WAMD = ($10,000 / $30,000) * 5 years + ($20,000 / $30,000) * 10 years = 8 1/3 years