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- 2013-8-23
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jimmykaw, you are correct. Duration is %change in bond price per % change in yield.
But there is another loose definition of duration as number of years to maturity. I dont think CFA is going to ask any question on having to calculate duration based on this definition. But this is rather to undersand the concept that: longer the maturity period of a bond, more is the interest rate risk on it and thus more Duration. |
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