Modified duration is a formula that measures the sensitivity of the valuation change of a security to changes in interest rates. Modified duration is most commonly used with bonds.

In many ways, bonds are more complex than stocks. Investors use a host of different metrics to evaluate bond investments, and one involves a concept known as duration, which helps an investor ...

Because of the way bonds react to interest rate changes, some high-quality bonds can fall around 15%-20% from a single percentage point increase in interest rates.

Because of the way bonds react to interest rate changes, some high-quality bonds can fall around 15%-20% from a single percentage point increase in interest rates.