# Duration meaning

Duration is defined as the length of time that something lasts.

When a film lasts for two hours, this is an example of a time when the film has a two hour duration.

noun

Continuance or persistence in time.

noun

A period of existence or persistence.

Sat quietly through the duration of the speech.

noun

The number of years required to receive the present value of future payments, both of interest and principle, of a bond, often used as an indicator of a bond's price volatility resulting from changes in interest rates.

noun

The time that a thing continues or lasts.

noun

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Continuance in time.

noun

A measurement of a bond’s price sensitivity to changes in interest rates. A high-duration bond, or one whose maturity date is a long way out in the future, is more sensitive to interest rate changes than a bond with a shorter maturity date. The duration is defined as the weighted average of the maturities of the bond’s cash flows, which include periodic interest rate payments and principal repayment cash flows. The weights are the proportionate share of the bond’s price that the cash flows in each time period represent.
Modified duration is a measure of Macaulay duration, which was named for Frederick Macaulay. It is calculated by dividing the yield maturity by the number of interest payments per year that have been adjusted to help estimate a bond’s price volatility. Modified duration allows an estimate of bond price changes for a small change in interest rates. For larger changes in interest rates, convexity is used. Convexity measures the way duration and price change when interest rates change. It does this through a mathematical formula that measures the curvature of the price-yield relationship.

(finance) A measure of the sensitivity of the price of a financial asset to changes in interest rates, computed for a simple bond as a weighted average of the maturities of the interest and principal payments associated with it.

noun

## Origin of duration

- Middle English
*duracioun**from*Old French*duration**from*Medieval Latin*dūrātiō**dūrātiōn-**from*Latin*dūrātus**past participle of**dūrāre**to last*deuə- in Indo-European roots### From American Heritage Dictionary of the English Language, 5th Edition

- From Old French, from Medieval Latin
*duratio*### From Wiktionary