Duration (Bond) Definition

Duration measures a bond's sensitivity to changes in interest rates, expressed in years.

What is Duration?

Longer-duration bonds are generally more sensitive to interest rate changes than shorter-duration bonds.

Duration is used by fixed-income investors to manage interest rate risk within a portfolio.

A bond with a duration of 7 years would be expected to fall roughly 7% in price for each 1% rise in interest rates.

Day trading is a strategy where positions are opened and closed within the same trading day.

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A debenture is a type of unsecured bond backed only by the general creditworthiness of the issuer rather than specific collateral.