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It means you can calculate how much bonds will move if interest rates change.
The objective of duration is to explain the value of the bond’s sensitivity to small paralell shifts in interest rates.
I know what duration measures or calculates. I often come across the two words “objective/absolute” when the word duration is explained. I want to know what these two words mean in the context of duration. Thanks already.
I know what duration measures or calculates. I often come across the two words “objective/absolute” when the word duration is explained. I want to know what these two words mean in the context of duration. Thanks already.
I know what duration measures or calculates. I often come across the two words “objective/absolute” when the word duration is explained. I want to know what these two words mean in the context of duration. Thanks already.
They mean the same thing in any other context. It’s not the Da Vinci Code (aka da code). It’s just plain English. Comprendez?
Whenever you associate the word “absolute” to some concept, the other word that comes to mind is “Relative”. And thats how curiosity was killing the cat
Dont overthink it. They just mean that Duration is a measure of interest rate sensitivity. They’re a first order risk
Thanks bud…!