
[Middle English duracioun, from Old French duration, from Medieval Latin dūrātiō, dūrātiōn-, from Latin dūrātus, past participle of dūrāre, to last.]
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noun
A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. Duration is expressed as a number of years. Rising interest rates mean falling bond prices, while declining interest rates mean rising bond prices.
Investopedia Says:
The duration number is a complicated calculation involving present value, yield, coupon, final maturity and call features. Fortunately for investors, this indicator is a standard data point provided in the presentation of comprehensive bond and bond mutual fund information. The bigger the duration number, the greater the interest-rate risk or reward for bond prices.
It is a common misconception among non-professional investors that bonds and bond funds are risk free. They are not. Investors need to be aware of two main risks that can affect a bond's investment value: credit risk (default) and interest rate risk (rate fluctuations). The duration indicator addresses the latter issue.
Related Links:
Find out how this measure can help fixed-income investors manage their portfolios. Use Duration And Convexity To Measure Bond Risk
Big-money investors can hedge against bond portfolio losses caused by rate fluctuations. Immunization Inoculates Against Interest Rate Risk
Is interest rate risk greater for long-term bonds than short-term bonds?
Not the intensity but the duration of high feelings makes high men.
— Friedrich Nietzsche, German philosopher.
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Dansk (Danish)
n. - varighed, forløb
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Ελληνική (Greek)
n. - διάρκεια
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Português (Portuguese)
n. - duração (f)
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Русский (Russian)
длительность, продолжительность
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Español (Spanish)
n. - duración
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Svenska (Swedish)
n. - varaktighet
中文(简体)(Chinese (Simplified))
持续时间, 为期
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中文(繁體)(Chinese (Traditional))
n. - 持續時間, 為期
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日本語 (Japanese)
n. - 持続, 存続, 持続期間, 継続
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العربيه (Arabic)
(الاسم) مدة, دوام, استمرار
עברית (Hebrew)
n. - אורך זמן, משך זמן
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