FT MarketWatch

Modified duration

A measure of the price sensitivity of a bond to Interest rate Movement. Equal to the Macaulay Duration divided by (1+ (bond yield/k)) where k is the number of compounding periods per year. It is therefore inversely proportional to the approximate percentage change in price for a given change in Yield. This is one of two ways to calculate duration, the other being Macaulay duration.

Related Terms: 5 Interest, Interest rate, Movement, Ratio, Yield
Other Related Pages: Category: Bonds Starting With: M
Additional Related Terms: 10-Q, 10-K, 12b-1 funds, Allowance for depreciation, Asset/equity ratio, Average collection period, Adjustable rate, Accrual bond, Accrual of discount, Accrued interest