Meaning 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 responsiveness of a bond's price-taking into account that expected cash flows will change as interest rates change due to the embedded option
More terms such as Effective duration in Dictionary E.
- Definition Emerging Markets:
- Examples The financial markets of developing economies effective duration definition.
- Definition Equilibrium Price:
- Examples The price when the supply of goods matches demand effective duration explain.
- Definition Equity Floor:
- Examples An agreement in which one party agrees to pay the other at specific time periods if a specific stock market benchmark falls below a predetermined level effective duration what is.
- Definition Eurobond:
- Examples A bond that is (1) underwritten by an international syndicate, (2) issued simultaneously to investors in a number of countries, and (3) issued outside the jurisdiction of any single country effective duration meaning.
- Definition Earnest Money:
- Examples Money given to a seller by a buyer to demonstrate the buyer's good faith. If the deal falls through, the deposit is usually forfeited effective duration abbreviation.
