What is Duration & Modified Duration? | Macauley Duration & Modified Duration calculations

#duration #debtmarket #investyadnya #yia
Modified Duration expresses the sensitivity of the price of a bond to a change in interest rate.
The price of a bond and interest rates have an inverse relationship, i.e. if the interest rates rise, the
price of the bond would fall and vice versa.
The modified duration explains the extent of rise or fall in bond price, given a change in interest rate.
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[@Amreetesh1]

Kindly check point no. 5 at 6:38 . As intrest rate rises bonds price fall and YTM should increase.

[@vishuu398]

Yes you are saying correct, when the interest rate increases the price of bonds decreases which leads to increase in YTM because market is offering more interest rate as compared to this bond coupon rate

[@shikhashersinghyadav475]

This concept always confused me, till I watched your video. What a great explanation. Thank you so much. Really appreciate. Shikha

[@ajaygaikwad5308]

Thank you very much for this video explanation. After a long time I have clear understanding of duration concept

[@suhanaankita1932]

Very clear and simple explanation

[@Kiyansh_Shaha]

Hi, very well explained…1 question: Why Modified duration is mentioned in years in many debt fund fact sheets since it is measures the % change in price when yield changes by x % ? In one debt fund I saw the Mod-duration is 6.15 years but it should be in percentage (%) right?

[@teegalapallikasyap8967]

I it is given in years it means that u get majority of your payment of the security within that time. Since u told 6.15 yrs, I think maturity should be 7 yrs. This is what told to me by my prof.

[@tanmayagrawal2335]

Very nicely explained, Thanks a lot🙏

[@bhargavpatel1524]

Sir please make video of ytm, modify duration and avarage maturity in hindi so that we can understand properly.

[@holy_trinity_GP_legends]

Excellent explanation thank you.

[@boeing747200lr]

Full bouncer. Please explain in layman's language. Thank you for the effort though

[@ujjawalmishra5751]

Haha here the same

[@januwuvi]

Same. :')

[@juzertambawalla]

can you explain in detail why does the YTM fall when interest rates rise...When interest rate rise, price of the bond will fall which I understand...But why does this impact YTM...

[@raikaranjit]

Very well explained.. Thanks a lot for posting it

[@amirhamzah1976]

Based on presentation of item 5, how to explain YTM decreases when interest rate increase

[@ChiomaJuliette]

pls whats the differnece between duration and modified duration @yadnya investment academy

[@itsmechinnuzz8141]

Sir what is the purpose of givibg weight to cash flow..what is its relevance?? Please explain sir

[@prashanthmathi7652]

Thank you sir..this is very helpful

[@gayathris8197]

"When interest rate rise, YTM falls" .. this is wrong. YTM rises and Bond price falls.

[@somrajdutta8366]

correct. Interest rates go in tandem with Yield (since long term bond price is inversely sensitive to current market rates)

[@Rey_B]

the interest rate itself is nothing but the ytm so yes what you say is correct

[@KA-oi4yf]

AMAZING EXPLANATION 👏

[@Rey_B]

very helpful video 🙏

[@anujatandon7436]

Sir, can you please explain why does the YTM and duration decreases when the interest rate falls? Thank you

[@ujjawalmishra5751]

Sir please take a look

[@crentistDaDentist]

When int rate falls the price of the bond will rise as the market now demands less interest so accordingly u will be discounting the bond with a lower interest rate which will increase the price of the bond. U have gained as a result. So duration will fall

[@piyushjain5148]

can any one explains about convexity of a bond

[@AjayGupta-ik2kp]

So what if Macaulay duration of a fund is low compared to the fund with high Macaulay duration. If Macaulay duration is less it means the bond has paid the cash early so after elapsing this time why will people buy this bond and price will fall significantly with interest rate fluctuation. But by the formula of MOD if macaulay duration is less than MOD is also less meaning lesser sensitive to interest rate fluctuation.Kindly explain.

[@subratadasgupta5097]

Bro from where can I get this Macaulay duration?? I can't find it in value research, morning star or even in money control. Please tell me

[@farogatolimjonova9566]

Guys, what is duration in simple terms?

[@anuragpant2545]

Please also cover effective duration

[@fzfz1458]

Thank u for the clear explanation

[@MuneebKhan-bf6hc]

How is 90.91 is calculated ?

[@PriyankaSingh-ws8le]

Please explain how YTM falls when interest rate rises...

[@InvestYadnya]

This video will explain you - kzbin.info/www/bejne/aHLOdKeObJaqjdk

[@JohnLee-cx6ik]

when interest rate rises, isnt the price of bond will drop, and that will result in an increase of YTM.. please explain to me sir, i am a little bit confused.

[@rahulagarwal9629]

Ytm will increase ...and MD will fall.

[@PerryCuda]

They don't. When interest rates go up, investors require higher returns on their investments, including bonds. This means that in order to attract investors, lenders must offer investors bonds at a lower price. At these lower prices there is a higher YTM - to discount the future fixed cash flows to the current bond price.

[@nrakash5987]

@@InvestYadnya hii sir, i couldn't figure out how ytm will fall with rise in int rates. Can u please provide explanation.. I have seen the video in the link..but still couldn't figure it out. Plz help me.its urgent. Thanks

[@sahilmagotra1606]

Thanks informative. But can you tell how we can relate this while selcting a portfolio. Like MOD duration tell sensitive of price So we can relay that our invested amount in that scheme will fluctuate by that much. What Macaulay make difference in our investment if interest rate changes ?

[@InvestYadnya]

It just shows sensitivity of the fund to interest rates. 1% change in interest can make this much change in your portfolio returns.

[@sahilmagotra1606]

@@InvestYadnya then what is difference. Is it like Macaulay tells change in interest and MOD duration tell change in price?

[@InvestYadnya]

Macaulay duration measures the weighted average time an investor must hold a bond until the present value of the bond’s cash flows is equal to the amount paid for the bond. MOD is a better indicator and more widely used.

[@subratadasgupta5097]

@@InvestYadnya I can't find the Macaulay during anywhere. Not in morning star, value research or even in money control. Please tell me from where can we get this Macaulay duration of any debt fund.

[@brianaranha4870]

Sir did not understand macauley duration, should have shown the calculations.

[@classesonline3572]

Differenceof Effective duration and modified duration

[@shriranggornal5742]

It's more complex than stocks. Please do more video to eloberate

[@InvestYadnya]

We have already done few videos on Bonds, please check this link - kzbin.info/aero/PLMRgW5Y9EKSnQEtkqas60tK_1hYDJUK-f

[@shriranggornal5742]

I regularly watch your videos, you guys are doing a great job for investor awareness. Link you pasted videos are really simple and easy to understand first time investor.but this video is bit complex to understand.few example might have helped us to clearly understand.

[@InvestYadnya]

It surely is a complicated concept....will surely try to make to even more simple.

[@abhi54452]

Thank you YADNYA investment Academy for such quick update

[@tanyamahajan1001]

V nice expln

[@satyakinandan8042]

Just reading out the lines from some where...

[@shivalaveti9405]

confused between mduration and pv01

[@charishree6062]

Has been explained very well. Any gud reference material to still study and educate pl...

[@InvestYadnya]

Thank you, we try to bring the best of the knowledge to you through our videos, so stay tuned for more...

[@jaydeepsuklikar3212]

Txs

[@manojsolairaj5684]

Effective duration

[@shraygarg6001]

atleast dont misconceptualise... when int rate rises YTM also rises....you have wasted a lot of time as i was searching for reasons why YTM decreases when int rate rise.

[@akhorhakho8759]

What do you mean when you say interest rates changes?

[@rajkamalsingh8439]

Sir, what does compounding periods in a year means in calculation of semi annually Macaulay duration ? Please reply looking forward.

[@punchaentertainments7840]

excellent

[@HarshVardhan-ui2ks]

awesome explanation

[@bharatbagani7952]

Didn’t get anything.

[@arunsahufinancial1097]

Please make videos in Hindi on Modified duration & YTM

[@InvestYadnya]

sure...noted

[@saurabhverma8197]

Yes pls

[@saurabhverma8197]

@@InvestYadnya sir pls make this vdo in hindi

[@saurabhverma8197]

Difference between Macaulay and modified duration in hindi pls

[@nikhilmule6341]

Sir Please create all these videos in Hindi so that we can easily understand

[@romeshkirpalani848]

Excellent video in.....chinese financial language😛

[@saurabhverma8197]

Sir pls ye vdo hindi m bnaye