ABSTRACT
A bond’s duration was defined by Macaulay as the weighted average number of years until the bond’s cash flows occur, where the weights used are the present values of each payment relative to the bond’s price. We can express Macaulay’s definition of a bond’s duration as: https://s3-euw1-ap-pe-df-pch-content-public-p.s3.eu-west-1.amazonaws.com/9781315145976/456687ab-676c-42bf-8f02-685caedc8116/content/eqn3_1.tif"/>
