This statistic is a surrogate for the expected life of the security. In general, the term refers to a quantification of a bond as to its yield and price sensitivity. It should be noted that duration is additive. This means that assets, liabilities, swaps, and other credit instruments can be added to arrive at a portfolio or book duration. Duration of a coupon security is less than its maturity.
Duration extends with maturity.
Duration is inversely related to coupon rate. Duration is inversely related to the market rate. See Effective Duration , Macaulay Duration , and Option Adjusted Duration . Dynamic Analysis - Is the approach to study market conditions over time. This compares to Static Analysis .