larger modified duration value means that the bond's price is more sensitive to changes in bond yields

larger modified duration value means that the bond's price is more sensitive to changes in bond yields

this makes sense. the longer the time to maturity - the longer the risk and term premia comes into play

Illya Gerasymchuk 2025-08-13 00:23

modified duration quantifies how much a bond’s price will change for a 1% change in bond yields

while the bond pays fix sums - its market value/price varies, so its yield is not fixed