Duration is the length of the seesaw’s lever: a longer lever can make the same rate move cause a bigger price swing.
01
Go deeper
Modified duration estimates the percentage price change for a small yield change. It differs from maturity. The approximation assumes other factors stay constant and becomes less accurate for large moves.
02
Make it concrete
Hypothetical illustration. With modified duration of five, a one-percentage-point yield increase implies roughly a 5% price decline, before other effects.
03
When you read a headline
Duration is an estimate, not a promise; credit risk and embedded options also matter.