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please define a "macaulay duration"

glossary FAQ: glossary.
B. Mooney from Tempe, United States
23 July, 2009

The weighted average term to maturity of the cash flows from a bond. The weight of each cash flow is determined by dividing the present value of the cash flow by the price, and is a measure of bond price volatility with respect to interest rates. Macaulay duration can be calculated by: The metric is named after its creator, Frederick Macaulay. Macaulay duration is frequently used by portfolio managers who use an immunization strategy. Macaulay duration is also used to measure how sensitive a bond or a bond portfolio's price is to changes in interest rates. Visit UFX bank

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