The duration for a bond with an embedded option when the value is calculated to include the expected change in cash flow caused by the option as interest rates change. This measures the responsiveness of a bond's price to interest rate changes, and illustrates the fact that the embedded option will also affect the bond's price.
Related information about effective duration:
- Effective Duration Definition | Investopedia
A duration calculation for bonds with embedded options. Effective duration takes into account that expected cash flows will fluctuate as interest rates change.
- CFA Level 1 Study Guide - Fixed Income Investments - Effective ...
Price Change Given the Effective Duration and Change in Yield Once you have computed the effective duration of a bond it is easy to find the approximate price ...
- Average Effective Duration
Average Effective Duration - Definition for Average Effective Duration from Morningstar -Average effective duration provides a measure of a fund's interest- rate ...
- Effective Duration Definition & Example | InvestingAnswers
We explain the definition of Effective Duration, how it works and why it's an important concept in business, finance & investing.
- Bond duration - Wikipedia, the free encyclopedia
7 Embedded options and effective duration; 8 Spread duration; 9 Average duration; 10 Convexity; 11 See also; 12 Notes; 13 References; 14 Further reading ...
- Maturity, Duration, Effective Maturity and Effective Duration
Jul 23, 2012 ... What are the differences between Maturity, Duration, Effective Maturity and Effective Duration? Here is a definition of each with examples.
- Calculating effective duration - Actuarial Outpost
Calculating effective duration Finance - Investments.
- Effective Duration: Subtleties and Considerations - BondEdge
BondEdge offers fixed income portfolio market risk and credit risk analytics.