can someone please shed some light on how its used (i.e. the process)… Thanks
http://www.investopedia.com/university/advancedbond/advancedbond5.asp Hope this helps. However, as far as I understand, most of the questions are focussed more on modified and effective duration as effect of interest rates on price of a FIS. However, this is not very straight forward. It consists of Macaulay duration and modified duration defined in terms of cash flows. However, the link explains most of the things.