Negative Relationship with Yield to Maturity: The term of a bond usually declines with yield. One can intuitively argue that the higher yields make the cash flows more heavily discounted,... Read More
Author: Arshiii
Characteristic of Modified Duration: It measures the percent change in the price of a bond for a 1% fluctuation in interest rates. The greater will be the modified duration the greater will... Read More
Types of Duration Generally, fixed-income securities have two types of durations-Durations: Macaulay Duration, Modified Duration. 1. Macaulay Duration Macaulay Duration is the average time it takes to receive cash flows of the bond,... Read More
works practically. Fractional ownership in real estate is the model by which many investors jointly own a piece of that property. In most cases, such investors will own a fraction or... Read More
technique produces a more comprehensive and precise idea of how the price of a bond would change following changes in the yield curve. This makes it particularly useful for portfolio... Read More
view: it focuses on key points such as 1-year, 2-year, 5-year, or 10-year maturities. This allows investors to understand how changes in different segments of the yield curve affect prices... Read More