Bonds, Interest Rates & Exchange Rates
What is duration?
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Duration is the maturity weighted by the present value of the bond's interest and principal cash flows, representing the average period over which you recover your investment.
It is also used as a measure of how sensitively the bond's price moves when interest rates change. A discount bond, which pays cash only once at maturity, has a duration equal to its maturity, while a coupon bond, which pays interest along the way, has a duration shorter than its maturity.
This answer is general financial information as of 14/10/2026, not investment advice. Rules and tax rates change, so please also check the latest guidance from the source institution.
