Modified duration shows bond price sensitivity to yield changes; a 1.859% price change per 1% yield shift. Macauley duration measures average time to receive bond cash flows, key for calculating ...

Bonds are popular fixed income investment instruments and are often regarded as bearing relatively low-risk burdens. While bonds are less volatile than other investments, they are not risk-free, ...

Sean Ross is a strategic adviser at 1031x.com, Investopedia contributor, and the founder and manager of Free Lances Ltd. Cierra Murry is an expert in banking, credit cards, investing, loans, mortgages ...

Interest-rate sensitivity, credit risk, and exposure to the yield curve are three of the biggest factors that have an impact on a bond's price. As a measure of interest-rate sensitivity, duration ...

Bond prices are sensitive to interest rate changes, and bond duration is a measure of just how sensitive. For instance, in Exhibit 1.1 (shown in my last article), an increase in interest rates for the ...

In November, my colleague Eric Jacobson published a Fund Spy article entitled "Bond Duration: An Art, Not a Science." In it, Jacobson listed the imperfections of duration as the predictor of how a ...

The carrying value of a bond refers to its face value, plus any unamortized premiums or minus any unamortized discounts. We can quickly calculate a bond's carrying value with only a few pieces of ...

Bonds don't get as much attention in the investing world as stocks do, but they play an equally important function in investment portfolios. The predictable cash flows that bonds offer stand in stark ...

Bond investors routinely have to make judgment calls about expectations on future conditions in the credit markets, including changes in prevailing interest rates and inflation. Using a break-even ...

Modified duration measures price sensitivity to interest rate changes. The calculation for modified duration is relatively straightforward. Modified duration is important for investors in determining ...