Sean Ross is a strategic adviser at 1031x.com, Investopedia contributor, and the founder and manager of Free Lances Ltd. Gordon Scott has been an active investor and technical analyst or 20+ years.

Bonds are sensitive to interest rate risk, which means that when interest rates rise, the value of bonds falls ... you would have a choice between two formulas: Macaulay Duration, which is ...

It is a measure of the volatility of the bond price concerning changes in interest rates. Modified Duration: The formula for modified duration expresses the measurable change in the value of the ...

is the annual coupon payments paid by the bond issuer relative to the bond’s face or par value. The formula to calculate the coupon rate of a bond is: Coupon Rate = (Annual Coupon Payment / Face ...