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Macaulay duration

• The weighted-average term to maturity of the cash flows from the bond, where the weights are the present value of the cash flow divided by the price.

• Is the present value of all cash flows, both principal and interest, weighted by time. It is a measurement expressed in years which is generally less than the stated maturity. An exception occurs for zero coupon bonds.

 
 

Follow this link for all the terms related to ratio.

 
 Embedded terms in definition
 Bond
Cash flow
Cash
Coupon bond
Coupon
Interest
Maturity
Present value
Principal
Stated maturity
Term to maturity
Time
Zero coupon bond
 
 Related Terms
 Dollar duration
Duration
Duration gap
Duration mismatch
Effective duration
Modified duration
Mortgage duration
Negative duration
Option adjusted duration

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