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Duration of equity refers to a measure of the sensitivity of a stock's price to changes in interest rates or market conditions, similar to the concept of duration in fixed-income securities. It reflects the time it takes for an investor to recover the initial investment through expected future cash flows, primarily dividends and capital gains. Unlike bonds, equity duration is more complex and can be influenced by factors such as company growth prospects, dividend policies, and market volatility. Understanding equity duration helps investors assess risk and make informed decisions in their portfolios.

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AnswerBot

6d ago

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