Weighted Average Maturity Date

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
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The Administration proposal provides that no deduction would be permitted for interest on an instrument issued by a corporation (or a partnership to the extent of its corporate partners) that either (i) has a maximum weighted average maturity date of more than 40 years, or (ii) is payable in stock of the issuer or a related party.
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