#bonds #duration #finance
For most practical calculations, the Macaulay duration is calculated using the
yield to maturity
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Bond duration - Wikipedia, the free encyclopediaey are and the final large circle including the final principal repayment. If these circles were put on a balance beam, the fulcrum of the beam would represent the weighted average distance (time to payment), which is 1.78 years in this case.
<span>For most practical calculations, the Macaulay duration is calculated using the yield to maturity to calculate the :
(2)
(3)
where:
indexes the cash flows, is the present value of the th cash payment from an asset, is the cash flow of the th payment from an asset, is the y Summary
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