Effective Duration
Measures rate sensitivity when cash flows can change with rates.
Formula
Variables: P_- price after yield fall; P_+ after rise; P0 initial price; Δy shift
What it means
Measures rate sensitivity when cash flows can change with rates.
Example
Reprice an option-embedded bond after symmetric curve shocks and divide the price difference by twice price times the yield shock.
How to interpret it
This concept should be read together with its market convention, measurement horizon and underlying instrument. BondStats presents it as an analytical reference rather than investment advice; instrument documentation and primary market rules remain authoritative.
Related Formulas
BondStats reference content is independently written. Mathematical relationships, abbreviations and market conventions are presented for educational and analytical use.