Definitions

weighted average maturity - Investment & Finance Definition

The average time it takes for securities in a portfolio to mature, weighted in proportion to the dollar amount that is invested in the portfolio. Weighted average maturity measures the sensitivity of fixed-income portfolios to interest rate changes. Portfolios with longer WAMs are more sensitive to changes in interest rates because the longer a bond is held, the greater the opportunity for interest rates to move up or down and affect the performance of the bonds in the portfolio. If interest rates move up, the value of a bond decreases because there are bonds in the market that now pay more interest and therefore are more attractive.


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Also Mentioned In


  • weighted average maturity date
  • WAM
  • anticipated growth rate
  • terms-of-trade
  • Macaulay Duration
  • average life
  • anticipated value at maturity
  • state municipal bond fund
  • weighted
  • average tax rate

Words near weighted average maturity in the dictionary


  • weighted-average
  • weighted average cost of capital
  • weighted-average-cost-of-capital
  • weighted average coupon
  • weighted average maturity
  • weighted average maturity date
  • weighted fair queuing
  • weighted-graph
  • weighted-mean
  • weighted round robin queuing

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