Written, signed, unconditional, and unsecured promise by one party (the maker or promisor) to another (the payee or promisee) that commits the maker to pay a specified sum on demand, or on a fixed or a determinable date. Promissory notes (such as bank or currency notes) are negotiable instruments.
Advanced Bond Concepts: Duration. The term duration has a special meaning in the context of bonds. It is a measurement of how long, in years, it takes for the price of a bond to be repaid by its internal cash flows. It is an important measure for investors to consider, as bonds with higher durations carry more risk and have higher price volatility than bonds with lower durations.
The risk that interest rates will rise causing the yields of bonds to rise and. Duration: Investors can quantify how much the price of a bond will change as the yield changes through duration, The Duration is a measure of the % change in a bonds value changes in yield.he risk that interest rates will rise causing the yields of bonds to rise and. Duration: Investors can quantify how much the price of a bond will change as the yield changes through duration, The Duration is a measure of the % change in a bonds value changes in yield.