Duration is the primary measure of interest rate sensitivity — it is the percentage change in price for a 1% change in interest rates. However, practitioners also look at convexity, which is the ...

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 ...

Still, more than once I've had clients balk at the idea of investing in bonds, offering the explanation, "They don't return as much as stocks." That's where it becomes the financial advisor's job to ...

When professional investors discuss the credit market, a term that often arises is duration, which is used to measure the sensitivity of a bond’s trading price to changes in interest rates ...

The 2008 financial crisis and the resulting market shocks had a number of surprising consequences. One that was particularly important to bond investors was the degree to which diversified bond funds ...

In a few recent columns, we’ve talked about duration and convexity in the context of changing market prices. They are some of the most misunderstood and misused terms in finance, and clarifying them ...

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 ...

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 ...

Whether you take an aggressive or conservative approach to investing, your asset allocation is likely to include some bonds. When reading about or researching bonds, you’ll hear about duration, an ...