Money Duration

A portfolio has 2 securities. Each security’s duration and market value is known. Which way is used to get portfolio money duration:

1, weighted average duration of the portfolio * market value of portfolio, or

2, the sum of two securities’ money duration.


2017 CFA exam morning session question 9 uses No 2.

Is that different than using 1?

  1. (W1*D1+W2*D2)*(MV1+MV2)

  2. D1*MV1+D2*MV2

Are they different?

The duration in which one spends all their money also known as longevity.