Duration

Duration is a term used in finance and medicine to describe the length of time that something lasts. In finance, duration is a measure of the sensitivity of the price of a bond or other debt instrument to a change in interest rates. In medicine, duration refers to the length of time that a disease or other medical condition lasts.

Finance

In finance, duration is a measure of the sensitivity of the price -- the value of principal -- of a fixed-income investment to a change in interest rates. Duration is expressed as a number of years. Rising interest rates mean falling bond prices, while declining interest rates mean rising bond prices.

The bigger the duration number, the greater the interest-rate risk or reward for bond prices. It is a detailed concept that shows how much the price of a bond would change if the interest rate changes. This is known as the interest rate risk.

Medicine

In medicine, duration refers to the length of time that a disease, illness or other medical condition lasts. This can be a short period of time, such as a few days or weeks, or a long period of time, such as months or years. The duration of a disease can be influenced by a number of factors, including the type of disease, the individual's overall health, and the treatment received.

For example, the duration of a common cold is usually a week to ten days, while the duration of chronic conditions like diabetes or heart disease can be several years or even a lifetime.

See also

• Time value of money
• Fixed income analysis
• Healthcare

References

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