Plain-English definitions, reviewed by an independent investor
Bond Duration
Duration estimates how much a bond’s price moves for a 1% change in interest rates.
Duration estimates how much a bond’s price moves for a 1% change in interest rates.
Price Change ≈ −Duration × 1% Rate Move
Why it matters
It is the standard ruler for interest-rate risk in fixed income.
Common confusion
Higher duration means more price swing when rates move; it is not the bond’s life span.
Frequently Asked Questions
High or low duration?
Low duration is steadier when rates rise; high duration gains more when rates fall.
Duration vs maturity?
Maturity is calendar time; duration is rate-sensitivity, usually shorter.