Accessibility Menu

Modified Duration

Learn how to use modified duration in evaluating the impact of interest rates on bond investments.

By Keith SpeightsUpdated Nov 19, 2024 at 12:02 PM

Key Points

  • Modified duration measures price sensitivity to interest rate changes.
  • The calculation for modified duration is relatively straightforward.
  • Modified duration is important for investors in determining whether to buy, sell, or hold bonds.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.