Effective duration

EFFECTIVE DURATION - The duration calculated using the approximate duration formula for a bond with an ...
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Average effective duration provides a measure of a fund's interest-rate sensitivity.
The longer a fund's duration, the more sensitive the fund is to shifts in interest rates.

Effective duration
The duration calculated using the approximate duration formula for a bond with an
embedded option, reflecting the expected change in the cash flow caused by the option. Measures the ...

effective duration
(1) One of several methods of expressing duration. More accurate than Macaulay duration or modified duration. See convexity, duration, Macaulay duration, and modified duration ...

Effective Duration - Measures the percentage change in price for a 1 percentage point or 100 basis point change in interest rates.

Effective Duration
A duration calculation for bonds with embedded options. Effective duration takes into account that expected cash flows will fluctuate as interest rates change.
Effective Gross Income - EGI ...

While compact, effective duration only measures the effect of a parallel shift in the yield curve across all maturities.

effective duration The duration for a bond with an embedded option when the value is calculated... effective net worth The value of shareholder's equity in a firm plus subordinated debt (debentures...

effective duration Duration measure in which it is recognized that yield changes may change the expected cash flow. This measure is appropriate to use when bonds have embedded options. See also option-adjusted duration.

The duration of a callable bond, also called its effective duration, may be considerably shorter than its stated maturity in a period of rising interest rates. Thus, as market interest rates rise, the duration of a financial instrument decreases.

For a bond with an embedded option, the effective duration is the approximate maturity measure that reflects the expected change in cash flow caused by the option.

The total debt owed by a firm to its creditors.
Effective duration ...

Because people didn't typically think in terms of continuously compounded rates, this lead to the modification of Macaulay's formula, which is now called "modified duration." Other terms, including "effective duration" and "option-adjusted duration" ...

See also: Sensitivity, Banks, Expense, Principal payments, Prepayment