Modified Duration
Modified duration is a measure of a bond's price sensitivity to parallel changes in interest rates; it estimates the percentage change in price for a 1 percentage-point change in yield, using the bond's Macaulay duration and yield assumptions.
Example: If a bond has a modified duration of 5.0, a 1.0 percentage-point rise in yields would correspond to an approximate 5.0% decline in price, all else equal.
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