DURATION BEAM

Where does the bond's
time really sit?

FACE VALUE

COUPON %

YTM %

YEARS

FREQUENCY

— YEARS / MACAULAY

MODIFIED DURATION—

MODEL PRICE—

Regular fixed-rate bullet bond. Modified duration = Macaulay duration ÷ (1 + periodic yield). It is a first-order measure of price sensitivity.

Where does the bond'stime really sit?