™A bond with modified duration near five may lose roughly 5% for a small parallel one-percentage-point yield increase, before convexity and other effects.
Bonds & Rates
Duration
A family of bond measures: Macaulay duration is a weighted cash-flow timing measure; modified and effective duration estimate price sensitivity to yield or interest-rate changes under stated assumptions.
Plain-English context
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Macaulay, modified and effective duration are different measures; a duration estimate is local and can change with yields or options.
Further reading and verification. Examples are hypothetical, not current quotes or recommendations. Product terms, tax treatment and market rules can change. FINRA — Duration