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Fundamental
Duration
Interest-rate sensitivity of a bond; approx. % price change for 1% rate move
Definition
Duration measures a bond's price sensitivity to interest rate changes. Modified duration approximates the percentage price change for a 1% change in yields. Longer duration = greater price volatility. Macaulay duration is the weighted average time to receive cash flows.
Related Topics
#bond risk
#interest rate sensitivity
#price volatility
#macaulay duration
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Category: Fundamental
Fundamental analysis examines a company's financial health, management quality, and market position to determine intrinsic value.
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