Duration
A measure of how sensitive a bond's price is to changes in yields, roughly the percentage its price changes for a one-point move in yields. The longer the bond, the higher its duration.
Example
A 10-year bond paying 4% has a duration of about 8: if yields rise from 4% to 5%, its price falls by about 8%.
Explained in
Related concepts
Newsletter
The Sunday note
One email every Sunday: the week’s most important stories, the mechanics behind them, and the numbers to watch next week. Free.