Duration concept


I’m currently trying to understand the duration concept for bonds. The below is what I come across on investopedia:


Let say for the 10 year bond example, why does the investor lose 7% instead of 10%. I could understand the price lose by 10% (1% for each of the 10 years) due to 1% interest rate increase, but why add back the yield of 3% when calculating how much the investor lost.

On another note, any other helpful resources or which topic in level 1 or 2 could I refer to to strengthen on the concept of duration? Thanks.

The bonds price return would decrease by 10%, indicating a duration of 10. The total return number of a 7% loss includes the 3% coupon payment you would receive as well. So 10% price decline plus 3% coupon added back equals 7% loss overall

Hi thanks for the reply.

However, for the 10 year bond, before the rate increase, the bond is already paying 3% coupon annually. After the rate increase, the coupon payment does not change, but the price of the bond would have declined by 10%. The fixed income return portion does not change, while the price loss is 10%, so shouldn’t the total loss be 10%?