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 ...

Bonds are popular fixed income investment instruments and are often regarded as bearing relatively low-risk burdens. While bonds are less volatile than other investments, they are not risk-free, ...

Here's how to use bond duration to understand how interest rates will affect bonds and bond funds. Bond duration describes the average time period before all the cash flows are received from a bond.

Sean Ross is a strategic adviser at 1031x.com, Investopedia contributor, and the founder and manager of Free Lances Ltd. Cierra Murry is an expert in banking, credit cards, investing, loans, mortgages ...

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 ...

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 ...

In November, my colleague Eric Jacobson published a Fund Spy article entitled "Bond Duration: An Art, Not a Science." In it, Jacobson listed the imperfections of duration as the predictor of how a ...

The carrying value of a bond refers to its face value, plus any unamortized premiums or minus any unamortized discounts. We can quickly calculate a bond's carrying value with only a few pieces of ...

One key aspect of any bond investment is its current yield. When a bond is brand-new, figuring out the bond yield is relatively simple, because in most cases, bonds are issued at prices that are close ...

Bonds don't get as much attention in the investing world as stocks do, but they play an equally important function in investment portfolios. The predictable cash flows that bonds offer stand in stark ...

Bond investors routinely have to make judgment calls about expectations on future conditions in the credit markets, including changes in prevailing interest rates and inflation. Using a break-even ...