dear sir,
can i know what is the difference between bond maturity and bond duration?i know when a bond matures,interest and principal will be paid..bond maturity is d average time it takes for a bond to pay its coupon and principal..but why duration aso measures the redemption period??is redemption period the same as maturity?thanks!
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bond maturity vs bond duration
12y ago#1'Maturity' has two meanings. Normally it simply means the actual date on which the bonds will be redeemed/repaid.
It is sometimes also used to mean the average time, and when used in that sense it is the same as the duration. (The examiner will not confuse the meanings - he will make it clear).
The redemption period is the time till maturity (maturity in the normal sense of the word). So if a bond is due to be redeemed in 10 years time, then the redemption period is 10 years.
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