A somewhat artificial measure used to compare bonds of different duration and repayment schedules. It is calculated as the average of the periods for which funds are available, weighted by the amounts available in each of these periods.
Convexity is a measure that captures the curvature of the relationship between bond prices and yields, providing a second-order adjustment to duration and accounting for non-linear price changes due to interest rate variations.
An interval is commonly defined as a space of time between events or states. It is a fundamental concept in various fields such as mathematics, statistics, economics, and more.
A comprehensive overview of lifecycle, including the different stages an asset or product goes through, its importance in various industries, and practical examples.
Comprehensive definition of the medium-term, its significance, applications in various fields, and how it compares to short-term and long-term durations.
An in-depth explanation of the policy term, its importance in insurance contracts, and how it determines the duration of insurance coverage.
A comprehensive exploration of the term 'Period,' an interval of time that can vary in length depending on the context.
Explore the comprehensive guide to Effective Duration, including its definition, calculation method, practical examples, and applications in the context of bonds with embedded options.
A comprehensive guide on interest rate sensitivity: What it measures, its types, and its implications in the financial markets.
Explore the comprehensive definition of Key Rate Duration, understand what it calculates, and learn the formula used in finance to measure the sensitivity of a security or a portfolio to changes in interest rates.
