The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Bonds & Fixed Income Investments

URL:  https://boards.fool.com/this-means-that-this-bond-has-a-duration-of-433-21708420.aspx

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.

Copyright 1996-2019 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us