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A common gauge of the price sensitivity of a fixed income asset or portfolio to a change in interest rates.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.


The amount by which a bond's price increases or decreases as the result of a 1% change in interest rates. When interest rates rise above a bond's own interest rate, its price usually declines because an investor can earn a higher yield with another bond. Likewise, when interest rates fall, the bond's price usually rises. Duration measures how much the price changes and, for that reason, is a measure of a bond's volatility.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


The number of years required to receive the present value of future payments, both interest and principal, from a bond. Duration is determined by calculating the present value of the principal and each coupon and then multiplying each result by the period of time before payment is to occur. The concept of duration is used to relate the sensitivity of bond price changes to changes in interest rates. Also called mean term.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.


In simplified terms, a bond's duration measures the effect that each 1% change in interest rates will have on the bond's market value.

Unlike the maturity date, which tells you when the issuer has promised to repay your principal, duration, which takes the bond's interest payments into account, helps you to evaluate how volatile the bond's price will be over time.

Basically, the longer the duration -- expressed in years -- the more volatile the price. So a 1% change in interest rates will have less effect on the price of a bond with a duration of 2 than it will on the price of a bond with a duration of 5.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
(153) Additionally, evidenced by the disconnect between state provisions and scholarship addressing durational limits on prediction and restoration of incompetent defendants, further study of these lingering questions is needed to aid states in developing reasoned legislation that adequately fulfills Jackson's due process requirements.
Missouri Constitution article III, section 4 lays out the "qualifications of representatives." (23) Article III, section 4's durational voter registration provision requires representatives to "be twenty-four years of age, and next before the day of his election shall have been a qualified voter for two years." (24) The legislature's use of the words "qualified voter" dates back to Missouri's 1875 Constitution.
A younger average issue age distribution linked with a low average face amount per life will generally have less stringent underwriting requirements and likely flatter durational slope.
Conversely, the highest pitch value produced by one of the male members is208.700 Hz and the lowest value is 127.860 Hz which shows the state of F0 produced by the vocal folds of these male subjects.As far as the duration is concerned, it was observed that the execution of both the syllables took longer when produced by the female members of the study sample, where the durational values range between 0.1113 seconds and 0.2173 seconds.
Indeed, I would go as far as to suggest that it is one that is likely raised by a number of spectators whenever a performer undertakes durational work of this kind, if for no other reason than that spectators themselves may need to urinate and must wonder--in the same way one often questions their own capabilities in relation to any virtuosic performance--how on earth this durational containment is accomplished.
And do the more ephemeral forms 'projects' (Povinelli 2011) and 'performances' (Butler and Athanasiou 2013)result in durational assets of some kind, such as benchmark symbols or mobilizable expertise?
The durational contrast may or may not be the only distinguishing property between two vowels.
Part I of this note discusses durational residence requirements, focusing on the elements of durational residence and the policies that animate them.
Analysis of durational deviations in construction projects carried out under the old and current public laws
(32) On the subject of durational time and consent Thompson noted that "[t]o say that the election must have been made before, or immediately at the [D]eclaration of [I]ndependence, would render the right nugatory." (33) In this way he gave voice to a belief repeated throughout antenati cases, asserting that a government that imposed itself at a specific date was arbitrary and non-consensual while one to which citizens could subscribe within the space of a reasonable period of time was consensual.
Moreover, long durational cultivars (AS-02 and LS-08) took relatively more days to enter into booting stage from jointing and minimum days taken for grain formation (Table 2).
Established in 1978, hcmf// is the UK's foremost festival of new music and occupies a unique position locally, regionally and nationally; it is held over 10 days in November each year in a variety of venues around Huddersfield and features over fifty events, including concerts, installations, talks, exhibitions, master classes, workshops, drop-in and durational events.