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Introduction to Macaulay Duration The Macaulay duration, named after its creator Frederick Macaulay, is an essential concept in the world of finance and investment that portfolio managers often use when implementing immunization strategies. In simple terms, Macaulay duration represents the weighted average term to maturity of the cash flows from
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What Is Duration? Duration is a critical concept for investors in fixed income securities as it measures the bond’s or debt instrument’s sensitivity to changes in interest rates. In simple terms, duration estimates how long it will take for an investor to recoup their initial investment through the cash inflows
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