Next video:
Loading the player...

Duration tells investors the length of time, in years, that it will take a bond's cash flows to repay the investor the price he or she paid for the bond.

A bond’s duration tells investors how much a bond's price might change when interest rates change i.e. how much risk they face from interest rate changes.

  1. No results found.
Related Articles
  1. Financial Advisor

    Why Bondholders Should Manage Duration Risk

    Bonds and bond funds are fixed-income investments, but their duration, combined with changes to interest rates, can lead to price fluctuations.
  2. Investing

    Why You Should Avoid Fixating on Bond Duration

    Financial advisors and their clients should then focus on a bond fund’s portfolio rather than relying on any single metric like duration.
  3. Financial Advisor

    The Effect of Fed Fund Rate Hikes on Your Bond Portfolio

    Learn how an increase in the federal funds rate may impact a bond portfolio. Read about how investors can use the duration of their portfolio to reduce risk.
  4. Investing

    Immunization Inoculates Against Interest Rate Risk

    Big-money investors can hedge against bond portfolio losses caused by rate fluctuations.
  5. Investing

    Investing in Bonds: 5 Mistakes to Avoid in Today's Market

    Investors need to understand the five mistakes involving interest rate risk, credit risk, complex bonds, markups and inflation to avoid in the bond market.
  6. Investing

    Use Duration And Convexity To Measure Bond Risk

    Find out how this measure can help fixed-income investors manage their portfolios.
  7. Financial Advisor

    How Rising Rates Impact Bond Mutual Funds

    The interest rate increase by the Fed was one of the most widely anticipated in history. Here's what it means for bond mutual funds.
  8. Investing

    The Time For Short Duration Bonds Is Now

    While the specter of rising interest rates have been haunting the markets for years now, it seems that fear is finally coming true. Given that scenario, the time for bond investors to get short ...
  9. Investing

    Do Long-Term Bonds Have A Greater Interest Rate Risk Than Short-Term Bonds?

    The answer is yes, and there are two main reasons why.
  10. Investing

    5 Fixed Income Plays After the Fed Rate Increase

    Learn about various ways that you can adjust a fixed income investment portfolio to mitigate the potential negative effect of rising interest rates.
Hot Definitions
  1. Benchmark

    A standard against which the performance of a security, mutual fund or investment manager can be measured.
  2. Mobile Wallet

    Mobile wallet is a virtual wallet that stores payment card information on a mobile device.
  3. Leverage

    1. The use of various financial instruments or borrowed capital, such as margin, to increase the potential return of an investment. ...
  4. Trumponomics

    Trumponomics is a term for the economic policies of President Donald Trump.
  5. Universal Health Care Coverage

    An organized healthcare system that provides healthcare benefits to all persons in a specified region. Many countries, such ...
  6. Davos World Economic Forum

    The annual meeting of the World Economic Forum hosted at Davos—a small ski town in Switzerland—in January each year is among ...
Trading Center