effective duration的意思|示意

The term effective duration is one of the key financial concepts used in the bond market. It measures how much a bond's price will drop if interest rates rise by one percent. The term can be broken down as follows:

\"Effective\" refers to the fact that the duration takes into account the fact that cash flows of a bond will change as interest rates change. It measures the sensitivity of a bond to changes in interest rates.

\"Duration\" refers to a measure of the duration of a bond. It is a measure of the amount of time that it takes a bond to be fully repaid.

The effective duration of a bond is calculated by taking into account all of the cash flows of the bond and calculating the weighted average of the length of time that it takes for the bond to be repaid. The effective duration is often expressed in years.

The effective duration of a bond can be used by investors to determine how much of a loss they could take if interest rates change. For example, if a bond with a five-year effective duration were to experience a one-percent increase in interest rates, its value would decrease by five percent. This can be useful to investors who are looking to manage their exposure to changing interest rates.

In addition to being used to calculate the impact of interest rate changes on a bond's price, the effective duration can also be used to compare different bonds. By looking at the effective duration of different bonds, investors can determine which bonds are more sensitive to changes in interest rates.

In summary, the term effective duration is an important concept for investors to understand. It measures the sensitivity of a bond to changes in interest rates, and can be used to calculate potential losses from interest rate changes. It can also be used to compare different bonds and determine which are more sensitive to changing market conditions.