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Subject:  Re: Bonds and Rising Interest Rates Date:  12/6/2004  12:54 PM
Author:  SuisseBear Number:  11350 of 36670

This means that this bond has a duration of 4.33 years, which indicates that if we had a rise in interest rates of 1%, this bond would decrease in value by 4.33%. And, that is all that the duration tells us!

Fwiw, duration also tells us the span of time to fully recover the cost of a bond.

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